Foreign buyers could eye Montreal and Saskatoon housing markets next, says report - Action News
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Montreal

Foreign buyers could eye Montreal and Saskatoon housing markets next, says report

A new report on real estate trends says foreign investors may start looking beyond Toronto and Vancouver.

Report based on interviews and survey responses from more than 1,400 real estate experts

There is a rise in permanent renters across the country. (Ryan Remiorz/Canadian Press)

A new report on real estate trends says foreign investorsmay start looking beyond Toronto and Vancouver and begin targetingmarkets in Montreal and Saskatoon in the coming year.

The report by PwC Canada and the Urban Land Institute says bothforeign and domestic real estate investment will shift locationsin 2016, where falling oil prices are hurting growth, to theeast, where the low loonie is boosting manufacturing.

Vancouver is the notable exception, rising to first place as thecountry's must-watch real estate market. Money is also expected tocontinue to flow into the Toronto market, the country's largest.

PwC says Calgary and Edmonton were, until recently, among thecountry's most promising real estate markets. However, as the price ofcrude has plummeted and investment in the oilpatch has dried up, bothresidential and commercial properties in the region have stoppedswitching hands as owners take a wait-and-see approach.

Meanwhile, real estate markets in Ontario and Quebec home to thebulk of the country's manufacturing sectorare poised to benefitfrom the lower loonie as well as the economic recovery in the U.S.,Canada's biggest trading partner.

And that could spark greater interest from foreign buyers in theMontreal market, PwC predicts.

Saskatoon could see a boost in 2016

Chris Potter, a partner at PwC Canada, says farmland around Saskatoon hasalso become attractive to foreign investors, although it remains to beseen how much of an impact the oil price shock will have on theprovince's real estate market.

"Sometimes people scratch their head about Saskatoon, but over thelast several years we've seen a lot of interest in Saskatoon, from anagriculture and timber perspective,'' Potter told reporters during aroundtable Tuesday.

"Saskatoon has some concerns, because of therippleeffect from theoil and gas industries and the impact that's coming from Alberta, butthere are a lot of other factors ... that are helping to contribute toits attractiveness now.''

The report is based on interviews and survey responses from more than1,400 real estate experts, including developers, brokers, propertymanagers and investors.

PwC says foreign investors are also likely to start snatching upmedical clinics and other real estate in the health-care sector, whichis expected to benefit from Canada's large population of aging babyboomers.

A rise in permanent renters

Meanwhile, the lack of affordable housing in Toronto and Vancouverthreatens to cull the urbanization trend in those regions, asfirst-time homebuyers move out to the suburbs in search of cheaperproperties.

Sky-high prices in certain urban markets are also changing attitudestowards renting, PwC said.

"Renting is no longer seen only as a temporary step on the road tohomeownership, but as an alternative,'' the report reads.

"Today, we are seeing the rise of permanent renters,a newdemographic in many Canadian markets, especially as a growingproportion of the population cannot assemble the down payment for anew home.''