CALGARY — Calgary and Edmonton have displaced Toronto and Vancouver as the top-ranked cities for overall real estate prospects, according to the Emerging Trends in Real Estate 2013 report released Tuesday.
The report, by PwC and the Urban Land Institute, said the Canadian real estate market is expected to remain steady with “modestly good” investment and development prospects across most property sectors for 2013, reflecting expectations of solid supply and demand.
Calgary was the top-ranked city in the country followed by Edmonton, Toronto, Vancouver and Ottawa.
In this year’s survey, Calgary ranked first in both investment and development prospects and second in homebuilding prospects.
“Growth characterizes Calgary’s future; it displaces Toronto as the top ranked city for 2013,” said the report. “This has made it challenging to acquire high quality real estate in Calgary, absorption of prime properties has reached record levels, and rents are being pushed due to limited supply.
“This trend will continue in 2013, especially in office and industrial employment space. Construction will increase in the housing and non-residential arenas, but nowhere near pre-crisis levels.”
According to survey participants, Canada’s real estate market will follow along in a seeming state of near-perpetual equilibrium compared with other more volatile regions studied in the report, including most obviously the United States.
“The results of this year’s Emerging Trends report reflects the fact that the Canadian real estate community understands real estate fundamentals and knows how to react to fluctuations in monetary policy and capital markets. Canada’s real estate industry continues to operate well despite uncertainties in domestic and global economies,” said Lori-Ann Beausoleil, PwC Canada’s Real Estate Leader.
The report said Calgary’s expanding economy is requiring a larger and more highly-skilled workforce. Employment forecasts indicate growth of 2.8 per cent next year and 2.9 per cent in 2014.
“This growth, driven mostly by the oil and gas industry, has made it challenging to acquire high-quality real estate in this market,” said the report.
“Absorption of prime properties has reached record levels and rents are continuing to be pushed due to limited supply.”
The report said potential approvals of controversial pipeline projects to the United States and into British Columbia would boost real estate construction projects further in Calgary.
The strength of Calgary’s real estate market is evident in both the residential and non-residential sectors.
According to the Calgary Real Estate Board, year-to-date as of Monday, total MLS® sales in the city of 18,905 are up 15.56 per cent from the same period last year.
Canada Mortgage and Housing Corp. is forecasting total housing starts in the Calgary census metropolitan area to finish at 12,400 units this year, an increase of more than 33 per cent from 2011 and the highest level since 2007.
RealNet Canada recently said Calgary has experienced the second best ever year for commercial real estate transactions for the first nine months of the year with $3.394 billion in sales so far this year.
And a recent report by Jones Lang LaSalle suggested a downtown office development boom in Calgary could be on the horizon.