Commercial steers clear of residential pitfalls

The Re/Max Commercial Investor Report, released Wednesday, found that almost all markets enjoyed increases in commercial sales and prices over the six months ending June 30.

That demand for commercial properties is expected to continue well into 2013, according to the report, a new study released Wednesday by the Realtor group Re/Max.

The report highlights the differences between commercial and residential sectors in Canada, more specifically, Vancouver, Toronto, Calgary, Edmonton and Halifax.

The success of the former is driven by a lack of inventory, business expansion and some of the lowest commercial occupancy rates in years.

The report findings echo those of a BMO study, released earlier in the week and just as bullish on the commercial sphere as Re/Max.

Still, banks are themselves more and more cautious about new construction projects, especially condo high rises.

That reticence is all about the weakening residential sales market.

While September residential sales were up 2.5% from August, they slid 15.1% from the same month in 2011.

“While some first-time home buyers may no longer qualify for mortgage financing under the new rules,” said CREA, “it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do.”

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