The commercial market is looking up, according to the analysis. It might be the right for you to jump into the market as some of the major cities in Canada are accounting for 65% increase in permit values. Montreal, Toronto, and Vancouver witness largest spikes.
A number of impetuses influence the upsurge of city-issued permits, including:
- Advancement in Oil, gas, and electrical industrial sectors
- The upcoming Pam-Am Games in 2015 hosted by Toronto
- And the surge of U.S. property investors entering the Canadian Market
City-issued permits granted in March amounted to close to $7-billion more, according to Statistics Canada, which is highest starts reported in roughly four years.
These impetuses – reported by PricewaterhouseCoopers and a national brokerage company – makes a lot of people want to jump into the market again. And perhaps they should, but the housing sector for senior citizens is being neglected.
Canadian Mortgage and Housing Corporation (CMHC) posit that 33 per cent of Canadians will be senior citizens by 2031. CMHC is Canada’s provider of mortgage loan insurance for the construction, purchase and refinancing of multi-unit residential properties.
As defined and reported by Statistics Canada, total construction value for September 2013: $371 million
- Change from September 2012: + 33%
- Change from 5-year monthly average: + 55 %
- Change from previous month: + 51%
Since last year, CMHC has started to offer insurance on commercial loans for multi-unit (5+) properties. This has lead to financing of residential properties up to 85% of the value of the property. With this major market change, commercial property trends have changed. There is greater scope for potential commercial investors with the opening of the market, and the lower commercial rates afforded by insured financing are attainable on these loans.
The conventional commercial mortgage loans starts as low as 4.10% for two years and right now, Canadians continue to expand their mortgage borrowing at a rate estimated to be between 4 and 6 percent a year. This trend is expected to continue in the final quarter of fiscal 2013, which will lead to the modest upsurge of residential rates over the coming years.
A big question mark hangs over the market demographic with the start of insurance on commercial loans on properties. While the rates are desirable and the time is ideal, this might be the best time to enter into property purchasing.
However, these new demands and requirements have not yet being satisfactorily addressed by current developers. Seek help of your commercial mortgage broker for to obtain a complete understanding of your options.