As many of us head back to the office this September, the post-pandemic reality for commercial real estate will be revealed. With vaccines now widely available, we’re seeing a growing confidence in Vancouver’s economic recovery, and with that, Vancouver’s commercial real estate market appears poised for a significant rebound. Strong spending, job growth, increased business investment, a low-interest rates environment and pent-up demand are just some of the factors driving improvements across all asset classes in Vancouver and across Canada.
Vancouver has always been an extremely buoyant market, and many companies are realizing it may be even more robust than initially thought. From where I sit at Colliers, there’s an unexpected level of confidence in all business sectors as we return to the office, driving greater demand and activity across the board. Here’s a quick summary of the challenges and opportunities ahead for each sector as we move into the second half of the year.
Office market rebound
Vancouver’s office market is experiencing a strong rebound, and demand for quality space and greater amenities is likely to continue. According to Colliers latest quarterly report, asking rates for office space in the Greater Vancouver area rose by 12 per cent in the second (Q2) 2021, with vacancy seeing just a slight increase, from 6 per cent to 6.5 per cent, quarter over quarter. With renewed optimism about returning to the office, there has been increased leasing activity in Q2, and while sublease space continues to make up around 30 per cent of all available space, this number is slowly diminishing as companies retreat from previous return-to- work expectations.
The office sector appears well-positioned for a strong performance. Vancouver is very much on the radar of multi-national tech and life sciences companies. And despite the pandemic’s inevitable impacts to flexibility demands and working from home, it is increasingly acknowledged that culture is crucial to corporate success and that is formed only when people are together. Employees want more flexibility than they had pre-pandemic, but whether this results in less occupied office space is still to be determined. With 62 per cent of office employees expected to return to the workplace after this Labour Day, the effect of increased vaccinations is starting to be felt positively in the office sector.
Industrial sector tightens
Industrial demand remained high during the pandemic, as e-commerce continued to gain in strength. The big news in this sector is that for the first time in the history of Vancouver, vacancy levels have now dropped below 1 per cent – to 0.7 per cent in Q2 2021. Amazon is a big part of that story with significant commitments in the past year to Vancouver and Vancouver Island.
The pricing of industrial land and space has been escalating for a number of years, pushing out a lot of smaller businesses to markets like Abbotsford, Chilliwack and Langley, markets now experiencing their own record-level lease rates and land prices. To continue this growth, we need to unlock more land and density, improve the pace of municipal approvals and stabilize development costs.
Multi-family draws investors
Multi-family continues to see strong growth, with capitalization rates compressing further. Yet Vancouver remains a top choices for investors. Increasingly, institutional investors are allocating capital to this sector, driving investment sales volumes. The repositioning of rental and condos shows the stability of this asset class and the attractive return metrics. The challenge with multi-family, and residential market overall, is the lack of supply. This is driven by the slow pace of municipal approvals and rising costs related to construction, labour and the supply chain. This has led to more municipalities offering bonuses to developers willing to build affordable and non-market housing, which in turn has driven developers to consider building rental projects. This should start to increase supply.
Retail has changed forever
If there is an unknown, it’s what’s going to happen in retail.
There’s been a lot of discussion about what the future of this sector will look like, and the general consensus is that e-commerce has changed retail forever. Post-pandemic business sentiment is improving, but many small businesses do not share this optimism. Some big boxes may never return to their pre-COVID status and are looking at ways to reinvent. It is expected that retail vacancy rates across all asset sub-types will continue increasing throughout 2021, but then either slow or begin to reverse in 2022. Retail rents have also taken a hit and are expected to continue falling well into 2022 when they will begin to stabilize.
In summary, the big difference for commercial real estate’s outlook for this fall is the renewed sense of optimism. Industrial demand remains strong, and with increased job growth, multi-family demand will be supported. The ongoing easing of restrictions and increased spending will aid retail. The recovery will be uneven, but it will continue to support commercial real estate demand in Vancouver.
Darrell Hurst is senior managing director of brokerage for Colliers in Vancouver.
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.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
