Avison Young's Mark Fielder on what the Liberal victory means for commercial real estate
Mark Fielder, president of Avison Young Canada, in a recent interview shared his thoughts on what this week’s election of a minority Liberal government will mean for the country’s commercial real estate (CRE) sector.
Fielder says the election of Prime Minster Mark Carney will bring renewed certainty and forward momentum to the CRE sector.
He notes that both the Liberals and Conservatives have pledged to eliminate GST on the purchase of a first home worth less than $1 million, and have promised to lower taxes on the middle class, expedite the approval of major energy infrastructure projects, and reduce government red tape and bureaucracy.
“These measures are all good for our economy and for commercial real estate,” Fielder said.
Fielder also lauded Carney’s financial and business credentials. The new prime minister previously served as the head of the Bank of England and the Bank of Canada. Before that, he worked at Goldman Sachs and Brookfield.
In terms of CRE market outlook for 2025, Fielder projected optimism.
Although US-led tariffs have disrupted global economies, in Q1 large and upper mid cap companies on the occupier and investor side are making decisions for the long term. Trade policy isn’t affecting their decision-making as much as smaller companies.
Fielder also says that office conditions are more positive than you might think, with smaller transactions moving ahead in the current economic uncertainty. However, large transactions have slowed significantly as capital opts for multiresidential assets.
“With a new government in place, we believe that business will start to build confidence about the future and get back to making strategic decisions regarding their business in Canada and globally,” he said. “This combined with strong fundamentals like low inflation and falling interest rates is a winning combination for the real estate industry.”
Neither low inflation nor dropping interest rates are a certainty however. Tariffs are a strong driver of inflation, and if they remain in the short- or long-term, CPI will rise.
Tariffs have also probably induced a recession in Canada, with Deloitte estimating -1.1% GDP growth in Q2 and -0.9% in Q3, before rebounding with 2.4% growth in the fourth quarter – likely reflecting a hope for tariff retraction in the third quarter or before.
The central bank may not wish to risk stagflation, so they could be more reticent to introduce the three rate cuts that Scotiabank is projecting.
Stephen Brown of Capital Economics told the Financial Post that Carney’s victory may mean a tighter Bank of Canada, with “modest risk” to projections of three rate cuts this year.
