Developments in technology, particularly through electronic communications media such as the Internet means that people around the globe are more connected to each other than ever before. Information and capital flow easier and faster. In some cases the ease of the movement of capital has been cited as a singular cause of declining and stagnant real estate markets being experienced in some parts of the world today. Globalization also has another equally important effect: goods and services can now move more easily and are increasingly available in all parts of the world. This has a two-fold effect on real property markets and on those people who offer professional services in these same markets.

While the flow of capital has had a significant impact on real property markets world-wide, globalization has also impacted these same markets through the relative ease of movement of people, goods and ideas (the other parts of the globalization equation).

Juliet Oxborrow, of Investment International in an article dated September 1997 suggests that "…a new school of investment management argues that geographical allocation is becoming a thing of the past. As companies become globalized and economies are increasingly run along the same lines, it is not a question of where you are investing but what you are investing in".

Globalization is also emphasizing the importance of "the city" over the broader "geo-economic" boundaries associated with states/provinces and countries. These local market areas are becoming more influential than many of the regional government structures. According to UNESCO, in 1950 Asia accounted for 25% of the population in the world's 30 largest cities. Today they account for nearly 54% and are projected to reach 60% by 2010.

In Canada we used to talk about the "Canadian Real Estate Market". Recently we have identified that we do not have one single market operating in Canada. We have a number of markets that depend on differing global influences and that we may have a number of differing markets within a small geographic area. One simply has to look at the office space market in the major cities in Canada to realize that they are not operating in concert in a "one-world" reaction to globalization. The markets in Vancouver (Asia/timber based); Calgary (oil based); Toronto (financial-based); and Ottawa (high-tech based) have performed in significantly different manners.

Calgary's oil-based real estate market has more in common with the cities of Halifax and St. John's on Canada's (5,000 miles away) east coast than the other real property markets in western Canada. The eastern coast cities of Halifax and St. John's are now shifting from marine-based economies to coastal oil-producing and exploration economies.

Ottawa, as well as being the nation's capital, is also the high-technology centre for the nation. This means that the recent downturn in this market sector has resulted in a shift in demand for office space, particularly in the suburban area of the city that is most favoured by the high-tech companies. Due to the dichotomy of the markets, the space traditionally used by the government sector has remained relatively stable, however, the global downturn in the high-technology market has definitely affected the real estate sub-markets in Ottawa.

Ottawa, particularly Kanata, because of its emphasis on high-technology, has a close correlation to real estate prices in San Jose/San Francisco and Dublin, Ireland. Dublin experienced a residential real property value increase of 14.6% in 2001. The residential market values in Kanata increased by 18.9% over the same time frame. Prices in San Francisco increased only 4.5% in the same time period, however, they arte considered to be at the leading edge of the market and experienced on increase of 33%for the year 2000 over the year 1999.

What this means to the Government of Canada is that although it may have most of its real property holdings (with the exception of its embassies and consulates) within the geo-political boundaries of Canada, we must realize that globalization means that we truly operate in many global markets that are defined by geo-economic boundaries. Our investment strategies, whether they be national, regional or community-based need to reflect that we operate within a market more influenced by global activities and than by geo-political boundaries.

The Real Property Services group at Public Works and Government Services Canada recognizes that "globalization" and "real estate" do not combine in to one homogenous global real estate market but a collection of markets influenced by the "geo-economic" market fluctuations and niches. In acting as the Government of Canada's real property experts we will endeavour to strike international alliances with other similar government organizations to ensure we provide the best possible service to the Canadian taxpayer.