Daily Market Update

New insights into who owns condo investments expected next month… Bank of Canada says REITS may be a better choice than condos for investors… Fracking should be delayed says Nova Scotia university president… And which Canadian city ranks among the world’s richest?

Daily Market Update
Exactly who owns all these condos? We may be about to find out
A new report from the Canada Mortgage and Housing Corporation is set to shed some light on condo ownership. With economists concerned over the heat in the market, CMHC is responding to calls for more data on what is driving prices up. Some believe that foreign investment in our major cities is a large factor; this has been the case in some overheated markets elsewhere, for example in London. CMHC’s Condominium Owners Survey is expected next month and is the result of a study conducted last autumn of those who have bought ‘at least one condo that is not their main residence’. It does not look like the report will show the level of foreign investment, and may be in line with a previous study focusing on the intentions of the owners regarding their property (second home, rental market, etc) and how it was financed. That report was never published as the data was deemed not to be reliable enough. Read the full story.
Bank of Canada says REITS may be better investment than condo
A research note from the Bank of Canada suggests those investing in condos for the rental market could have made a better choice. The note acknowledges that buying into a real estate investment trust (REIT) historically outperforms direct purchase of a condo for rent. The research focuses on Calgary and Toronto and looked at return on investment over various time periods. In Calgary for example, a medium term investment in a REIT of between 3 and 7 years yielded a total return of 78 per cent against a 41 per cent return on a single condo investment. However, for those looking for a shorter investment, the condo saw an 18 to 27 per cent yield over a 1 to 2 year period, while the REIT only managed 11 to 12 per cent. Read the full story.
Nova Scotia should put fracking on hold
The president of Cape Breton University is calling for the proposed fracking activity in Nova Scotia to be put on hold. David Wheeler says the delay would enable more studies to take place into the effects of the exploration for shale oil and gas. Residents in the province protested two years ago against fracking and a moratorium was put in place. Concerns include contamination of water supplies and air pollution; the industry denies the claims. Mr Wheeler says that more research is needed and that once there is enough knowledge for people to make informed decisions local communities should be consulted. As well as the worries about their communities and family lives, some residents are concerned about the possible impact on the value of their homes. Read the full story.
Toronto – Canada’s millionaires’ playground
Only one Canadian city makes it onto the list of the twenty wealthiest cities in the world. Toronto ranks at 15th on a new study into the largest number of millionaires per capita. Just under 2.3 per cent of Torontonians have a net worth greater than US$1 million, a far cry from the world’s wealthiest city, Monaco, where 29.2 per cent are millionaires. It does mean that Toronto beats Paris and San Francisco in the rankings. Of course, if real estate prices continue to rise at the rates we’ve seen in the last year, we could see Toronto in the top 10 one day. Read the full story.