George Doyle
Globe editors have posted this research report with permission of Dundee Capital Markets. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:
In this report we try to outline the main effects of the sudden drop in oil prices on listed Canadian real estate. In summary, net migration to Alberta will likely slow but will remain positive. We could see a drop in rents and increase in vacancy across real estate sectors in Alberta, but should oil prices stabilize and trend upwards in 2015, a recovery to previous levels would follow.
This is especially true of multi-family where after the downturn in 2009, rents and vacancy levels recovered by 2011. We think IIP.UN and CAR.UN could be net beneficiaries from lower oil prices due to lower utility costs and that the strong drop in the price of MEQ represents a buying opportunity for investors who have normalization and gradual recovery (12-month horizon) in the price of oil as their base scenario.
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