<p>Last year was another significant one for the real estate market as British Columbia introduced its tax on foreign buyers and the federal government made another set of changes to mortgage rules. The market remained relatively strong despite the changes, but with the landscape for real estate in flux, many institutional investors are fine-tuning their approach to the sector in 2017.</p>
<p>When it comes to returns, the biggest component will likely come from the income side in 2017, says Kevin Leon, president and founder of Crestpoint Real Estate Investments Ltd., a Torontobased commercial real estate investment manager. “When forecasting projected returns for Canadian investment real estate in 2017, the majority of the return will be comprised of income, with a smaller component originating from capital appreciation,” he says. “With bond yields forecasted to increase, capitalization rates will likely be flat for most property sectors in 2017.”</p>