Commercial real estate in Metro Vancouver experienced a period of adjustment similar to that seen in the residential market this past year, according to a CBRE Vancouver Market Outlook, and that is resulting in a mixed outlook for the near term going into 2023.
While there is some uncertainty going into the next year, the underlying fundamentals of the Vancouver market that have created resilience in the past still exist, said the outlook.
Strong performance is expected in the industrial sector of commercial real estate, according to Jason Kiselbach, senior vice-president and managing director with CBRE. He cited shifts in manufacturing, with the sector starting to see more activity in North America.
“There is a lot of inventory still being ordered and going through warehouses as supply chains correct. With port activity continuing, I think industrial is still going to be one of the stronger asset classes,” he said.
Though available land has been a challenge for Vancouver, he said people have been finding ways to unlock development sites and redevelop functionally obsolete properties.
“We’ve seen a few sales like that for future redevelopment in the core markets, but it’s definitely a limiting factor for us,” he said.
Increases in interest rates have softened demand for industrial strata preseales, according to the report. It is predicted that this will influence land prices which have increased alongside industrial strata over the last several years.
The industrial asset class will continue to see low supply in 2023, according to the outlook.
“Based on our mid-case absorption scenario which assumes absorption of two-thirds of the remaining supply that is not pre-committed, we expect vacancy to be at or below 1% in 2023,” the outlook said.
Office real estate saw a notable year in 2022, as more companies looked to move back to in-person work, creating a demand that halted during the pandemic, according to Kiselbach.
“Looking back at this year, there was a ton of activity, especially the first half of the year in office. The asset class is going through a bit of a period of adjustment, and it’s playing out over a longer period of time than we thought it would,” he said.
In 2023, it is expected that office real estate will remain somewhat strong as more companies adjust to hybrid or in-person work models. As those decisions are made, adjustments will have to be made to current ways office space is utilized, which will lead to some transaction activity, according to Kiselbach.
The retail asset performed better than expected in 2022, Kiselbach said.
“It feels like retail had gone through its evolution a few years ago, and was a more stable asset class this year. There’s a critical shortage of retail space as well. If we go into a recessionary period, which most people are predicting, consumer staples or discretionaries, like grocery stores, pharmacies, dentists, doctors, those will all perform pretty well. It’s a good asset class in a bit of a tougher economic backdrop,” he said.
Due to issues with supply chain and e-commerce, Kiselbach noted that there has been a resurgence in in-person shopping, driving demand for retail space.
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.
