Resilient commercial real estate markets in Western Canada are highly likely to rebound in the second half of 2021, according to RE/MAX.
In the latest edition of its Commercial Real Estate Report, RE/MAX said that the commercial sector retained respectable strength thanks to institutional investors and private equity, which fuelled demand for multi-unit residential, industrial, and office buildings.
“Industrial captured the spotlight [during the pandemic] as e-commerce sales exploded across the country – prompting even greater demand – while the retail and office sectors struggled with lockdowns and safety measures,” said Elton Ash, regional executive vice president at RE/MAX of Western Canada.
Building from this momentum, RE/MAX said that the major drivers of intensified commercial market demand this year will be historically low interest rates and sustained post-pandemic recovery. Greater consumption as economies reopen will also contribute to the upswing.
“Rebounding global demand for primary energy should help bolster economic performance, as well as demand for commercial real estate, in Alberta in the second half of 2021,” Ash said. “In the interim, we could see out-of-province institutional investors walk-away with some of the city’s most coveted assets.”
Another asset class to look out for will be farmland, especially since the overall average price for the asset in Canada increased by 3.7% last year.
“Saskatchewan’s attractive price point is expected to continue to attract investors and end users, especially those from province’s that have higher farmland values, in the coming months,” Ash said. “This segment is also expected to heat-up as foreign investment returns to the overall market in 2021.”