If the 100^th anniversary of the First World War armistice should teach us anything, it’s that change is constant and even the most momentous of events don’t set the agenda for long.

Just look at what’s happened over the past couple of weeks.

The U.S. mid-term elections, deemed the most important in the nation’s history, left American politics more fragmented than before. The Democrats gained ground, but not so much as they wanted. The Republicans lost ground, but not so much as their opponents hoped.

Oil on a slippery slope

In Canada, we had in September a surprising outcome at the polls in New Brunswick, while lines continue to be drawn between factions of premiers and the Trudeau government over carbon pricing. Related to that, we have continued delays and uncertainties around pipeline projects in Canada and the U.S., with the usual give and take of environmental impact versus economic benefit and, in Canada’s case, the need to secure our own domestic energy supply.

The prices at the pump have eased since earlier in the fall, which is a boon to motorists.

But that may be a double-edged sword considering the recent skid in oil prices has been sparked by a supply spat between the U.S. and Middle East producers. The OPEC nations continue to overproduce (though they might soon cut production), while the U.S. has thrown down the gauntlet with the greatest one-year rise on record in its output.

For Canada, the issue is the current low market price for oilsands bitumen. This hasn’t been helped by holdups with the Keystone XL pipeline.

How all this could impact the Canadian economy and the value of the loonie remains to be seen. At this point, however, the North American economies continue to do well, maybe even too well, as investors express relief a new tri-lateral trade deal has been hammered out.

Urban shift

On the housing front, interest rates have risen a bit and CMHC predicts “moderation” in the market over the next two years. Not a real correction or pullback, mind you, but a return to “levels that are more in line with economic fundamentals such as income, job and populations growth.”

CMHC still sees global trade as a risk factor to the Canadian market, despite NAFTA 2.0.

Major Canadian cities continue to invest in infrastructure projects such as mass transit, which will keep the economic pump primed with public dollars. Two years after a noisy unveiling by the Trudeau government, the Canada Infrastructure Bank might finally start doing something to support the many other infrastructure investments which are needed across the country.

Then we have GM announcing it will have an autonomous car for sale in 2019.

I have noted before how profound an impact the widespread adoption of autonomous vehicles will have on urban planning and commercial real estate (see Impact on real estate of a Johnny Cab world). A lot of parking lots and parking garages could become obsolete – billions of square feet of often valuable real estate that will now be available for more productive uses.

Looking inward is looking backward

The world is constantly changing, shifting and evolving, creating new opportunities and stifling old ones.

Whether it’s an individual, an organization or a government, the goal of the day is survival. And this, as it has always been, is predicated on an ability and a willingness to change.

The U.S. approach is to look inwards with a growing sentiment that it is unhappy doing business with the rest of the world. Brexit continues to make a mess of Europe as England also tries to dictate the agenda — as if the British Empire is still a force to be reckoned with as it was a century ago.

The world today is far different than it was at the end of the First World War. Looking inward is looking backward.

The world faces, for the first time, a need to figure out how to better do business between us all. Those countries which recognize this and take positive steps in that direction will reap the benefits of increased trade.

Just look at Venezuela – it should be one of the richest nations on the planet with its oil reserves and could have been a South American version of Norway with its huge sovereign wealth. Instead, its leaders have chosen a path of failure thanks to the anti-globalization sentiments of former president Hugo Chávez.

Change also affects real estate

This of course also applies to the real estate industry, where the emphasis must be on local efficiencies and assets which provide an adequate return, while moving away from those areas of business where a player has difficulty competing.

In Canada, we have seen great examples of brands that had huge commercial real estate investments (e.g. Eaton’s and Sears) and the retail market dominance and opportunity to adapt to a new reality. They didn’t, suffered the consequences and are now extinct.

However, greater real estate wealth first begins with strong, forward-looking government that adopts progressive policies which help to create opportunities and draw investments from beyond our borders.

To discuss this or any valuation topic in the context of your property, please contact me at jclark@regionalgroup.com. I am also interested in your feedback and suggestions for future articles.