It is impossible to crowbar residential investors from the outlook for the commercial real estate sector in Metro Vancouver because it is condominium buyers who have been driving commercial land and property deals to new levels.
Which makes the current housing market downturn a wild card in the outlook for the commercial real estate market into 2017. As of November, Metro Vancouver condominium resales had plunged 22% from a year earlier, reports the Real Estate Board of Greater Vancouver (REBGV). Sales of new highrise condos were down 21% from 2015 by 2016’s third quarter, according to the Urban Development Institute, and were even 4% below the pace in the 2014.
Yet, during 2016’s first nine months, sales of land for residential development accounted for 53% of commercial real estate volumes in the Lower Mainland and dwarfed every other type of commercial real estate transaction, according to REBGV’s commercial division.
Add in the 109 sales of rental apartment buildings, and residential plays made up $5.8 billion of the total $9.5 billion in commercial transactions to the end of September 2016, a dominance that has characterized the Metro market for two years.
Many commercial developments also rely on a healthy mix of condominiums to make the numbers work, whether in office or retail projects and even, lately, in industrial and hotel developments.
Still, analysts remain confident about 2017 commercial real estate investments across Metro Vancouver.
By Frank O’Brien | January 3, 2017