As we approach 2015, investors need to know what to expect for both the Canadian and global property market in order to maximize their income and wealth potential. So where is the market heading?
2015 Global Real Estate & Capital Trends
Next year is expected to be one of the most pivotal years for international real estate investment. The latest data shows global investment in real estate is already up close to 20% in 2014. This is expected to be just the tip of the iceberg of what will be seen in 2015.
Perhaps the most notable factor of all is the new London CGT (Capital Gains Tax), which comes into effect by April 2015. London investment property prices have already been compressing to facilitate fast sales ahead of the deadline in order to preserve wealth and minimize tax liabilities. Analysts are predicting that more noticeable discounts in the London real estate investment market are expected over the next two quarters, with some of this new capital coming to Canada.
While there will be ongoing uncertainty in the markets in 2015 due to the political landscape, global civil unrest, and frothy Asian and US markets just to name a few, this will be accepted as the new norm. Fund managers and private investors have become comfortable operating in this type of environment and know how to pull off wins in spite of it.
Increased liquidity in capital markets and access to investment property financing is expected to ease significantly in 2015. Banks in the United Kingdom have pulled back on financing prime London property and need other channels to put their capital to work, with Canada emerging as an easy choice. The US has also begun forcibly pushing lenders to make more loans and free up credit.
Canadian Commercial Real Estate Performance
On the Canadian stage, Edmonton continues to demand the spotlight as the most promising destination for asset value growth and yield performance, as its fundamentals keep improving.
Edmonton continues to evolve and command respect as a leading business destination, startup scene, a magnet for VC’s and angel investors, and tourism. While many projects have been in the works and in talks for 12 to 24 months, it will be in 2015 that many of these projects come to fruition.
As these developments begin to have a tangible impact on the local economy, new jobs will be created and wages will grow. This will result in increased competition for Edmonton retail floor space causing shopping plaza rents to head upwards, providing significant yield and equity gains for those who invested early.