Toronto's downtown core still in major trouble amid soaring office vacancy rate - blogTO | Canada News Media
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Toronto's downtown core still in major trouble amid soaring office vacancy rate – blogTO

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The high interest rates and financial difficulties of 2023 are expected to ease and bring change to a few industries in Toronto this year, including the commercial real estate sector, which is still floundering amid record low vacancy.

Parallelling a housing market that saw shockingly few sales last year, the city’s office market saw a substantial 15 per cent drop in leasing activity compared to 2022, with a glut of space expected to sit empty until the 2040s at the current rate.

While experts at commercial real estate company CBRE say in a new report that the city’s office towers “continue to face challenges with vacancy reaching new highs,” they are expecting — or, like residential realtors, just hoping — that things will turn around in 2024.

The firm says that there are not yet any plans for new office development starts this year, which means that only some five million square feet of new space already in progress will become available — an indication of a “fundamental shift” in office work to a hybrid model post-COVID.

“Companies won’t be leasing more space than they had before… [but] rising confidence and employment could boost office occupancy in 2024,” they forecast.

“After declining more than 15 per cent last year versus a year earlier, commercial real estate investment activity will recover in 2024 as credit conditions return to normal and investors get better access to capital.”

CBRE also predicts that modern, quality space with exceptional amenities — like the Well — will continue to draw companies, while older buildings are increasingly left behind. “Many landlords will look to capital improvements to support the long-term appeal of their assets. But in many cases a more comprehensive re-think may be required,” they write.

This re-think may include the conversion of lower quality office space into housing, though brokers note it is “not always feasible to convert these buildings into residential, and in many cases, it is cheaper to do new construction.”

Meanwhile, non-office commercial real estate is still booming, such as the retail and food and beverge sectors, which have ongoing positive momentum despite customers spending less. Many new brands in this area are on deck to enter the Canadian market for the first time in the coming months.

Industrial spaces, though, appear to be less in demand lately, and will continue to be through 2024 due to “weaker economic conditions.”

“2024 will not be an easy year, and there are challenges ahead. Liquidity is still a mixed bag and it is too early to call for a dramatic real estate recovery,” CBRE says. “But the conditions for a recovery are in place, particularly within the capital markets.”

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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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.

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Homelessness: Tiny home village to open next week in Halifax suburb

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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.

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Here are some facts about British Columbia’s housing market

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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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