The Canadian real estate market continues to strengthen as it moves into the new millennium. New construction is occurring in moderation and there has been increased capital markets involvement in both ownership and financing.
In a tight lending environment, commercial mortgage-backed securities (CMBS) are emerging as a viable alternative for Canadian borrowers. The effects of the credit crunch of late 1998 are still being felt in the form of a lack of available debt capital, decreased liquidity, and wider spreads. Life insurance companies, pension funds, and banks dominate the conventional lending market, but are facing demutualization and consolidation.