Real estate has remained unpredictable throughout the pandemic for most of the world, but Canada in general — and Ontario specifically — have experienced a tumultuous marketplace over the last few years.

While many insiders predict that 2022 will result in widespread improvement of the industry, the big picture is also complicated by rising prices and questions over how the government will handle taxes and interest rates in the near future.

Here’s the latest news roundup for commercial real estate in Canada.

‘Land rush’ comes to Ontario, GTA

Ontario and the Greater Toronto Area have seen a surge in land deals over the last year.

Commercial real estate firm CBRE found that the area saw more than $835 million in gross sales of land last year as ballooning demand pushed costs — and rents — higher, The Record reported.

In its report, CBRE reported that 12,500 acres (or approximately 5,060 hectares) of industrial, commercial and investment (ICI) land worth $837 million was sold in the Waterloo region in 2021 — a whopping 95 percent more acres than the year before.

Many companies in Toronto have begun to seek out land further west, which has caused prices to spike in many nearby areas, including Waterloo. Hamilton, for example, saw a 51 percent increase in acreage sales in 2021 over the prior year, with a total of $500 million in sales.

In just a few years, the prices for many properties in Southwestern Ontario have doubled — and in some instances, tripled, The Record reported.

In addition, industrial rents, which had stagnated for about 20 years, rose quickly from $4-$7 per sq. foot to $10 or more.

2022 Primed for Growth of Commercial Real Estate

Throughout the previous 12 months, real estate markets in North America continued to boom, thanks to stimulus packages passed by the Canadian government to ward off the worst effects of the global pandemic, Real Estate News Exchange reported.

According to the report, other factors influencing the increase include:

• Increased demand across all asset classes

• Pent-up consumer demand

• Migration

• A return to pre-pandemic immigration levels

• Increased vaccination rates, which resulted in economies reopening across states and provinces

Investment performance stayed at significant levels throughout 2021, especially among industrial and multi-family residential rental properties across North America, RENX reported.

Sectors that will continue to see growth in 2022 include:

• Storage

• Retail

• Hotel and industrial

By the end of 2021, unemployment rates had returned to something close to pre-pandemic levels. As the national and local governments relax their restrictions, the economy will likely respond, resulting in increased demand for commercial real estate.

Rental prices rose for office space in the fourth quarter of 2021, a trend that RENX expects to continue.

“It is expected that the Bank of Canada will raise interest rates in the first half of 2022 to cool inflationary pressure, though lingering pandemic restrictions may factor into the timing and quantum of the increase,” RENX wrote. “The Bank of England and National Australia Bank increased rates in December 2021, an indicator of what lies ahead for Canada.”