The Real Property Association of Canada (REALpac) and FPL Advisory Group have just announced the results of their 2012 REALpac/FPL Canadian Real Estate Sentiment Survey for the first quarter of 2012.
Their findings show the first-quarter reinforced many of the last quarter’s views about the strength of the Canadian commercial real estate sector, with the overall real estate sentiment index coming in at 61 up from 60 during the last quarter of 2011. However during the first quarter last year the sentiment index was 71, and in spite of many respondents reporting improvements there are also expectations that the rate of improvement will decline during the year. While this may sound bleak it’s important to remember that a score of 50 reflects a positive trend, and this is the 10th straight quarter where the index has been in positive territory.
The current index was 64 for the first quarter which is the same score as during the last quarter of 2011, and future index is 58, down from 71 year ago. Many think this drop is due to the substantial improvements seen during the last couple of years which means there is less room for continued progression during 2012, and that the Canadian market may be coasting. However most remain cautiously optimistic for the year, and see demand is being fairly consistent especially with low interest rates set to continue. Most expect the market to remain stable with little change.
In comparison the US sentiment index has remained relatively flat at 68, but the future index is now 70 reflecting the fact that the market in the US still has plenty of room for improvement as they are still emerging from the recession and are hoping to see more certainty in the European Union crisis.
The survey was based on the thoughts of 55 leading real estate executives, including residents, CEOs, board members and other senior executives. Respondents represented income producing real estate including retail shopping centers, office buildings, industrial buildings, senior residences, hotels and multifamily residential buildings.
REALpac is Canada’s premier industry Association for investment real property leaders and its members own in excess of C$180 billion in real estate assets.
FPL Advisory Group is a group of companies focused on providing highly specialised advisory services to the real estate and financial services industries.