Returns in Canadian Real Estate Highest in Over 20 Years

The rate of growth in capital values more than doubled in 2005, pushing the total return on real estate in Canada to 18.7%, from 13% a year earlier, according to the ICREIM/IPD Canadian Property Index. The Canadian Property Index is published annually by The Institute of Canadian Real Estate Investment Managers (ICREIM) and Investment Property Databank (IPD) in the UK.
"An insatiable appetite for real estate as an asset class is driving values up," said Phil Tily, Director of International Operations at IPD. "All property sectors enjoyed stronger capital growth in 2005." Real estate in Alberta benefited from the boost the oil and gas sector has given the local economy, with Calgary and Edmonton recording the highest returns of the 6 major markets (at 26.5% and 23.4% respectively). Vancouver compared well at 21.4%. Improved, but slightly lower, property returns were recorded in 2005 in Toronto (16.4%), Ottawa (16.8%) and Montreal (15.2%). Retail remained the strongest performing sector with a total return of 21.4%, but returns on offices made up noticeable ground, almost doubling to 18%. Industrial posted another solid performance (17.6%). Returns on residential rental properties continued to lag (9.9%). Additional results will be presented at the 2006 results launch to be held in Toronto March 30 (contact Patricia Arsenault, Clayton Research, for details).