Canadian real estate investors increase risk appetite: Colliers

“In the U.S. and Canada, cheaper and easier access to debt was seen as a positive and is leading to more confident investors in the market,” said the Colliers report on its Global Investment Sentiment Survey for 2011. “Overall, investors in this market were more risk-aggressive than other regions, with this likely to be a result of the freeing up of debt.”

In highlighting the Canadian market, Colliers International Senior Vice President of Investment Services Milton Lamb said none of the respondents to the survey listed access to debt as a key factor to being able to grow their portfolio. The primary concern was the supply of “for sale property,” with 64% citing this as their primary concern.

He also pointed to the growing risk appetite – the result of improving fundamentals and confidence that the economy will continue to expand.

“In sharp contrast to last year, most Canadian investors appear to be willing to take on more risk,” Lamb said. “This year’s survey shows 64% of investors have moved out on the risk curve relative to six months ago.”

A shortage of properties for sale has also been pushing investors outside of the core Canadian cities into more tertiary markets, said Lamb.

Most felt Canada was on the upswing in the property cycle, but not yet the peak. Some 68% said Canada was in the upswing, compared to 14% who said it was already at the peak.

Those willing to park their investment dollars in foreign markets have also been increasingly confident in doing so, especially with the options available in the depressed U.S. housing market.

“This is most likely because so few opportunities are coming to market (in Canada), and the view that there is more upside in non-Canadian markets,” said Lamb. “Canadian investors are also armed with a strong currency that allows opportunistic investors to buy at attractive prices when priced back into Canadian dollars.”

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