The 33rd annual Emerging Trends in Real Estate 2012 report by PwC surveyed 950 real estate industry experts from Canada, the U.S., and Latin America.
“Canadian consumers who have been on a spending and home-buying spree, encouraged by low interest rates, could see their self-assurance ebb, and job growth has decelerated in response to all the noise about European and U.S. debt woes,” said Lori-Ann Beausoleil, PwC Canada’s real estate leader. “Sensing a general slowdown, respondents to our survey are taking a ‘better-to-be-cautious’ investment approach to 2012.”
If not for what’s happening outside of Canada, the country’s real estate market might have risen even higher, said respondents.
“If not for what’s happening elsewhere in the world, Canada would be on fire,” said one PwC respondent. “It makes a big difference when the government is not broke.”
The report noted that while unemployment is nearly two points lower than the U.S., respondents to the survey found “little job growth” in Canada. “We need to develop more high-skilled manufacturing industries like Germany,” said one respondent.
The survey found Toronto and Vancouver retained the best prospects for most types of real estate. But the report cautioned against the growing boom of new condos in Canadian cities.
“Especially in Toronto, the proliferation of new apartment towers leaves residents without immediate access to playing fields or nearby green environs,” said the report. “The accommodations may work for young professionals more interested in the local bar and restaurant scene, but do not accommodate the needs of families with children.”
The limited construction of single-family homes in Toronto, meanwhile, has led to increased values on the inner suburban rings, meanwhile, said the report. Yet the investor survey showed 50% of respondents felt 2012 should be a “buy” year for apartments, compared to 28% who said “hold” and 22% who said “sell.”
In Vancouver, respondents said demand remains strong, but a shift in China’s political environment could lead to some “slippage” or a least a levelling in what is considered an “overpriced” condo market.
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