The commercial real estate industry in Canada will flourish after the pandemic because of these three reasons.
Central banks have lowered interest rates during the pandemic to encourage economic activity. They want the financial markets to be as liquid as possible. As a result, people have been taking out mortgages at attractive interest rates. Banks have been busy because of this influx of business. Real estate prices have also increased because of favorable macroeconomic conditions. This trend will continue if central banks keep interest rates low. Commercial real estate investors will buy shopping malls and hospitals. Sellers will make a lot of money, especially if buyers engage in bidding wars. The overall industry will benefit as a result.
Increase in real estate agents
A lot of people became unemployed during the pandemic. Instead of automatically looking for a new job, they have been thinking about their options. The pandemic has been a period of self-reflection. The world slowed down when lockdowns were implemented. People no longer want jobs with zero growth potential. They want to build meaningful careers. As a result, many people became real estate agents. There are more agents now than before the pandemic. Agents are incentivized to sell as much as possible since they are paid based on commission. Real estate agents help the industry move forward by increasing the frequency of business transactions.
Back to the office
Companies want their employees to return to the office but there has been some pushback from employees. They enjoy working from home because of things such as saving money on gas and food. They can also spend more time on hobbies. However, businesses have trouble building a strong company culture if everyone is working remotely. People do not just work when they are in the office. They also have casual conversations on breaks. Employees eat lunch together and become close friends. People cannot do this without being in the same room. Therefore, employers want people to come back. They want better communication among workers. Landlords are helping tenants make the transition by providing incentives, such as new fitness facilities and speakeasy bars.
Overall, Canada’s commercial real estate industry will be prosperous once the pandemic ends.