Sharlene Massie, founder of Calgary-based employment agency About Staffing, made great time on her commute from a nearby suburb earlier this week, reaching the city’s empty downtown core in only 15 minutes. The trip in non-pandemic times would take 45 minutes out of her day – but this shortened commute came at a cost.
“Where it used to be booming and bustling downtown, it really is empty,” Massie said, adding that March 2020 marked a stark turning point for the city. “That’s when really everything shut down almost permanently. It got colder and drier and emptier, and just stayed there.”
The 2015 downturn in the energy sector sparked the growth in office vacancies, which has continued climbing steadily in Calgary’s downtown area over the past few years.
Then, things got worse. Once the pandemic sent many people to work from their homes early last year and crashed the price of oil into negative territory, the city’s commercial real estate sector was struck by the dual threat. Calgary’s office vacancy rate has nearly doubled since 2015, hitting an all-time high of 28.7 per cent in the third quarter of 2020, according to a report by CBRE.
Greg Kwong, CBRE’s regional managing director in Alberta, said it’s too soon to sound the death knell on Calgary office space, but he expects vacancies to worsen under these conditions before they improve.
“Close to 80 per cent of our office space in the downtown core is occupied by energy companies,” Kwong said. “Their top lines are getting killed right now, so they’re scrutinizing every expense line item right now, and two big ones are employees and office space.”
Meanwhile, consolidation in the energy industry is expected to be a larger trend moving forward, according to Jeffrey Craig, an energy analyst at Veritas Research. He said the layoffs stemming from these mergers will lead to more office vacancies down the road, pointing to the cost-cutting measures following Cenovus Energy Inc.’s takeover of Husky Energy Inc.
“They say synergies are $600 million, and $500 million of that will be … largely in salaries and probably leasing that’s coming out of the business and is unlikely to come back,” Craig said.
He added that a low oil demand environment is not where large-scale, job-creating energy projects are launched.
“Building an oil sands mine, building a project creates a ton of economic activity. You need a lot less people to maintain [these projects].”
While the downturn in oil hit Alberta’s corporate sector harder than other provinces, COVID-19 was a wild card that shook up office buildings in every major city in Canada – including Calgary.
The future of the work from home trend may still be up for debate, though companies are re-evaluating how much space they will need to lease moving forward. Massie said she expects more Calgary firms will continue downsizing to smaller offices.
The trend is changing the landscape of the city. “You can’t leave, cannot walk past one building and see that it’s even got tenants in it,” Massie said. “You have to go inside to see that people are still operating.”
Still, Massie said she had been hearing from employees who were finding it difficult working from home full time, looking forward to returning to the office at least part time. She adds that the province has had its eye on a few sectors like tech, transportation and restorative construction that could see more hiring – and more people – in Calgary’s downtown offices.
“I know that there are lots of other things that are happening in Alberta. We’re not dead yet.”
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
