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Major drop in commercial sales but not for lack of demand!

Greater Vancouver has seen a major drop in commercial sales over the last year, but not for lack of demand, as the supply is seriously constrained compared to last year’s available inventory, according to a report released by REMAX Commercial.

There were 875 sales during Q2 last year, but only 595 this year. Last year’s $4.62bln fell 37.5% in 2017, as commercial sales in Q2 only totalled $2.89bln. Land sales also decreased year-over-year in Q2, from $2.12bln in 2016 to $1.51bln this year – a 29% drop.

The report noted that local investors are Greater Vancouver’s greatest market drivers, but that there’s also strong interest originating from south of the border, as well as Europe and Asia.

The GVA is absorbing office space quickly - the vacancy rate for A-class offices is 6.7% -- and, in Q2, over 700,000 square feet of industrial space was absorbed, 50,000 more than the same time last year. Helping pad those numbers was Amazon, which leased 76,000 square feet of office space earlier this month. Post-secondary institutions are feeling the squeeze for more infrastructure space, and the 30-storey Bosa Waterfront Centre near B.C. Place could help, as it will have 355,000 square feet of office space. West Pender is also slated for development in the near future.

The REMAX report stated Bank of Canada interest rate hikes haven’t affected the market yet, but that could change next year with the expected hikes December 6. Low supply in the commercial market will also continue well into next year. Source: Canadian Real Estate Magazine