Daily Market Update

Investment expert says a crash will come… Toronto has too much office space… Surge in new home sales south of the border… And could drive-thru grocery stores become the new ‘must-have’ for homebuyers?...


Housing crash is coming says portfolio manager


An Edmonton portfolio manager is so sure there will be a crash in the housing market that he’s written a book on how to survive it. Hilliard MacBeth from Richardson GMP wrote the book after realising the extent to which many of the hundreds of households he manages funds for are very exposed to the housing market. MacBeth says that historic data suggests that we could see a correction of 50 per cent, taking prices back to the level they were at when the current bubble started, which he says was 1999 or 2000. With high levels of household debt and some investors owning large property portfolios, he sees a potentially devastating problem for the market and wider economy. MacBeth’s prediction for the crash is spring or summer next year. The book is called “When the Bubble Bursts: Surviving the Canadian Real Estate Crash”. Read the full story.


Too much office space in Toronto


Could Toronto’s commercial real estate sector be in danger from over-supply? Figures suggest that by 2017 the vacancy rate for offices in the city could be at levels not seen since 2003 with more than 10 per cent of units vacant. Avison Young Canada says that doesn’t include a large amount of new construction which is due to be completed in 2017. Experts say that those who are financing many of the new projects and also those who own older buildings are likely to suffer the most if vacancy rates continue on the current trend. As supply outstrips demand, commercial rents are also set to slide adding more pressure on landlords. Read the full story.


US surge in new home sales


Data for existing home sales may have taken a hit in August south of the border, but the same isn’t so for new homes. Figures released yesterday show an 18 per cent surge in new home sales in August, rising to their highest level for more than 6 years. July’s figures were also revised from a 2.4 per cent drop to a 1.9 per cent gain. The biggest increase in sales was in the western states, with a 50 per cent increase. Read the full story.


Will drive-thru grocery stores catch on?


Largely unknown in North America but popular in parts of Europe, drive-thru grocery stores could be the biggest change in retail for a generation. Consumers order online and collect their goods without leaving their car, just like fast-food restaurants. Loblaw is trialling the concept at a new store in Richmond Hill and if it’s successful we could start to see them appearing across Canada. For workers this is a revolution; do your shopping online at work and pick up your groceries on the way home. For the real estate market this could become another ‘must-have’ on buyers’ wish lists. Read the full story.

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