Edmonton’s office real estate market is seeing a resurgence after breaking a five-year record for the most office spaced leased in the third quarter since 2018 and industry experts are pointing to the education sector as a main contributor.
According to a report by Avision Young, a real estate service firm, Edmonton’s office market leased 165,000 square feet of space in the third quarter, the highest reported absorption by the city since the 159,000 square feet leased in 2018.
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Cory Wosnack, managing director of Avison Young Edmonton, said post-secondary institutions are one of the greatest contributors to the market right now. Wosnack said office buildings are being converted into teaching facilities.
“We are seeing the education sector grow and so most of the space that’s been absorbed in the last three months has been to accommodate the growth in the education sector. We’re seeing office buildings look at new ways to change in traditional use,” said Wosnack.
Wosnack warned that not all buildings can be converted into new facilities. A reoccurring conversation among those in the industry is how to revitalize office buildings that are “functionally obsolete.” Ideas have been floated and the best option for those buildings if they cannot be revamped into facilities like hybrid office spaces is converting into residential properties.
The issue is that it comes with financial risk, said Wosnack.
“Many of these buildings convert quite nicely to residential.It’s expensive.It’s risky.It takes a lot of upfront capital.But the the basic characteristics of these office buildings are excellent conversion opportunities and conversion to residential would address the need for more affordable housing Downtown.”
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Edmonton’s resurgence in the real estate market is good, but it is not where the city should be. Three years of the pandemic has contributed to a concern around the market and the value of the space, bringing up questions surrounding the utility of office space and the need for the space in pre-pandemic times.
Avision Young said there is a 20.4 per cent vacancy rate in the city, which is high, and more work needs to be done to attract people to the Downtown core where many of these vacant spaces are located.
Wosnack goes back to post-secondary institutions like NorQuest College and NAIT who are showing more interest in developing space more concentrated in the Downtown core, which in turn brings more people to the area.
“Post-secondary institutions (in Edmonton) are one of the greatest contributors to the Downtown scene and they have thousands of staff and most staff would like to live close to work. And we have many international students and many of them don’t drive and they’re strong supporters of public transportation and so to address that growth, we have an opportunity to see office buildings accommodate the residential demands,” said Wosnack.
“We used to think about downtown cores as central business districts, but today we refer to them as central social districts and the buildings that are succeeding are the ones that are in more vibrant locations.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
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.
