COVID-19 Impacts Canada’s Commercial Real Estate Market
Entering 2020 the Canadian real estate market was stabilized and on the rise. Organizations such as the Canadian Real Estate Association suggested evidence that real estate activity was to continue to improve into 2020; with pricing continuing to rise or accelerate in many parts of Canada. Fundamentals of such evidence consisted of declining mortgage rates, government incentive programs and national sale trends.
As a result of the COVID-19 pandemic however, the climate of the Canadian real estate market has changed. Investors, landlords and tenants have become impacted by the global ripple effect of business closures, closed borders and decreased spending habits. They have been regularly evaluating the impacts of COVID-19, and dynamically adapting their operations and contingency plans to support their business and staff.
What does this mean for the commercial real estate market? It means that, the longer health advisors and governments of Canada continue to urge social distancing and mandate non-essential business closures, the higher priority it is for businesses to mitigate the economic impact. Investors are currently scouting opportunities, businesses are working to balance their financial positions, and tenants have paused expansions and/ or have begun downsizing their operations; inevitably lowering employment rates and the demand for real estate.
Real Estate News Exchange (RENX) recently featured an article interviewing Keith Reading, Research Director for Morguard discussing insightful forecasts for the impact of COVID-19 on the Canadian commercial real estate market. Click here to read the article.
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