PricewaterhouseCoopers (PWC) and the U.S.-based Urban Land Institute have named Calgary as the top market for property investment in its annual Emerging Trends in Real Estate (2013) report. The report ranks three western cities among the five top top-performers for next year - and one of the eastern picks looks shaky. Here is the report's rationale:
Calgary (1). Growth characterizes Calgary's future; it displaces Toronto as the top ranked city for 2013. This has made it challenging to acquire high quality real estate in Calgary, absorption of prime properties has reached record levels, and rents are being pushed due to limited supply. This trend will continue in 2013, especially in office and industrial employment space. Construction will increase in the housing and non-residential arenas, but nowhere near pre-crisis levels.
Edmonton (2). Real estate investors predict a good 2013 for Edmonton investment prospects. Edmonton is an example of a secondary market in search of high-quality real estate investments in strong economic locations. With Edmonton's growth, comes more development and non-residential construction dominates the picture. Participants also rank Edmonton as the number one home building area.
Toronto (3). The number one market to watch in 2012, Toronto delivered mixed results and responses for 2013. Survey results show Toronto taking steps back in all three categories this year. Investment prospect values fell and the city's rank went from first to third among nine Canadian markets.
Vancouver (4). Vancouver's economy has sharpened up and will look to continue that trend into 2013, but Emerging Trends survey results show declines in all three categories. The investment prospect value for Vancouver declined 0.47 points, and the rank dropped from second to fourth. An interviewee notes, "Overbuilt Vancouver is flat. Lots of supply." Development prospects showed similar movement-down in value and rank, falling from first last year to fifth in 2013. Vancouver's government red tape continues to make it more difficult to develop real estate every year. Homebuilding prospects also do not look as strong year-over-year-down from first to sixth.
Ottawa (5). In 2013, the economic outlook for Ottawa looks weak. Economic slowdowns will affect residential and nonresidential construction, as declines in both areas are expected. With this decline in development, an investor says the "Ottawa market is very tight and will be difficult to enter." Yet despite the challenging economic times, survey participants still believe in some opportunities in this market.
