Vacancy rates in Calgary, Edmonton industrial property plunge as investors forced to reach beyond Vancouver, Toronto
The industrial real estate boom shows no sign of abating in Canada, driven in part by the pandemic’s surging need for warehouses to hold online shopping orders and building materials for renovation projects, according to a new report.
Vacancy rates for industrial properties in the second quarter fell the most in Calgary and Edmonton as investors reached beyond tight markets in Vancouver, Toronto and Montreal, where rates hit historic lows of 1.5 per cent or less, real estate researcher Jones Lang LaSalle says. Calgary was at 4.6 per cent, Edmonton at 5.5 per cent.
“Calgary and Edmonton are rapidly seeing available options disappear as users look to some of the few Canadian markets that still have significant vacancies,” JLL says in the report. “Calgary has led the charge with vacancy contracting 160 basis points in just the last six months.”
Demand for industrial property is part of a global trend in part sustained by a shift in discretionary spending — itself sustained by government stimulus payments — away from high-contact services, such as traveling and dining out, to tangible goods such as appliances and buildings supplies for renovations. Online shopping orders need to be stacked in distribution warehouses, while those same manufactured products also must be made somewhere.
The JLL report also found office space vacancies remain highly impacted by remote working, despite looming plans by many companies to return to at least hybrid working arrangements. However, some companies are taking advantage of lower rental rates to upgrade into higher quality space.
Canada’s overall office vacancy rate increased to 13.3 per cent during the second quarter, ranging from the tight Vancouver market of 6.8 per cent vacancy to 30 per cent in downtown Calgary. Edmonton was at 20 per cent, Montreal at 12 per cent, downtown Toronto at 9.8 per cent and Ottawa at 8.3 per cent.
“Although demand for high quality space remains strong, vacancy rates are expected to climb, due to a steady stream of new supply nearing completion over the next few quarters,” JLL says. “This is true even in Toronto and Vancouver which are notorious for their low-vacancy rates.”
In the retail sector, the lifting of restrictions during the second quarter will be tempered this fall as governments and businesses contend with an emerging fourth wave of COVID-19 cases and consumers grapple with vaccination passports and other controls.
“Canadians will increasingly spend on recreation and entertainment services, whose sales will rebound from weak levels,” JLL says in the report. “Travel services and transportation should also see an impressive run as borders reopen and the number of available flights increases. However, retailers should also expect that the labour shortage and supply-chain bottlenecks will make it more difficult to meet any unexpected increase in demand in the near future.”
Financial Post
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
The Canadian Press. All rights reserved.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
The Canadian Press. All rights reserved.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
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