Market Update: Western Canada
Overall Demand for Commercial Real Estate Remains Strong in Western Markets, but Available Supply is Limited
Office market transaction volumes are down in Vancouver; however, demand remains strong and lower activity volumes reflect the lack of investment opportunities. The Calgary economy is recovering, but is still seeing continued weakness in the energy sector, which is weighing on the office and industrial market fundamentals. Results from the Q2 2018 Investment Trends Survey show that while transaction volumes remain low, there is still a strong interest in the industrial and apartment markets in Alberta. Although demand remains strong, investors are sharpening their pencils and waiting for attractive opportunities. Larger institutions are focusing more on core assets and divesting of non-core assets, which is giving more opportunity for private investors to move into the market. This was best seen in Edmonton where almost 60% of investment volumes came from Canadian private investors.
Q1 2018 Vancouver Market Area Property Transactions | Total $ Volume by Sector
Investment activity in properties for redevelopment continue to drive the majority of investment dollars in the Vancouver market area with residential land sales accounting for $1.1 billion. While new policies and mortgage restrictions have had an impact on overall housing market in BC, demand for new condominiums remains strong with developers and investors continuing to seek redevelopment and intensification opportunities, more recently along the Skytrain extensions into Coquitlam.
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