December 23, 2013 Neil warshafsky

Greater Transparency is Need of the Hour for Canadian Real Estate

Canada Real estateThe concerns about the current and potential drawbacks that influence the Canadian real estate are debated by a number of potential figures, who voice about the apparent lack of transparency in the market.

Transparency is an economic term that is an essential prerequisite for a free and efficient market. It measures the risk levels for investors while suggesting the impacts of efficient and transparent market on the flow of investment. According to Jones Lang Lasalle Global Real Estate Transparency Index 2008, Canada stood as the world leader in the field, among the 82 countries that were surveyed, with 1.17 composite transparency scores.

However today, the market trends have been changed. “It will come as no surprise to those who follow the worldwide real estate market to learn that Canadian investors seemingly cannot get enough of US commercial real estate” – quotes PropertyForum.com

There is a lack of public access to accurate data in the real estate market, as to where the influx of investment is generated from – between domestic and overseas investors. This is something, which the Canadian authorities need to address sooner rather than later and understand the factors that are really driving the real estate market investments.

Due to inefficiency of analysts, who are unable to assess the state of the market, it is resulting in losing out of various consumers products as the new investors and the entrepreneurs are unable to drive innovation in the real estate sector.

The prices have pushed high over the last few years in Canada, due to the demands of “hot money” from overseas investors and a lack of adequate property supply, a relatively strong economy, and a well-managed government budget.

Canadian investors are looking towards US with funding. In the U.S., every single detail about the transaction goes into public record. Armed with the transparency of information, end users are able to make better decisions about property investments, which will ultimately make the market more competitive. Even Canadian real estate investors have coffered $20 billion into the U.S. market over the last 12 months. So why is Canada not operating on a similar basis?

Another issue that has risen with the vagueness of the information is that the issues, such as unsubstantiated claims of potential money-laundering cases from domestic and overseas investments, remain unmonitored. The suspicions are greatly coming from overseas investors in London who have been looking for a place to “park their money” in the region.

The problem persists and nobody is suggesting a solution to observe the widespread money-laundering issues within the commercial property market. This can store up problems for the future and may impact the economy.

There is room for implementing a strict regime in the Canadian real estate market to take control of the particular trends and influences on an ongoing basis. Moreover the misrepresentation of any data should be taken as misrepresentation of any data should be taken as a punishable offense.

With the achievement of changes in the real estate market and proper data display, more transparency can be achieved which will empower the consumers to understand the  most important financial decision of their lives.