Skip to content

Weekly Buzz: Modest uptick in Prairie market, diminishing Metro Van sales volume

Western Investor's media content roundup for the week of Apr. 3 to Apr. 7, 2017, featuring top stories from Business in Vancouver and the Burnaby NOW


This week’s most buzz-worthy stories in the Western Canada commercial real estate market tackle two vastly different markets: Metro Vancouver and the Prairies. In B.C., sales are declining at a pace not yet met by cooling prices, while a perpetually stagnated Prairie market is seeing a little hope on the horizon as commercial sales post a slight increase in Edmonton. Meanwhile, limited supply in Greater Vancouver continues to dominates the conversation in nearly every sector, while a glut of supply prevents the Prairie markets from seeing a significant decrease in vacancy rates.

Here are Western Investor’s pick of the top four real estate stories published this week.



Agricultural, industrial sectors compete for limited real estate – Business in Vancouver

The story continues, as BIV reports. Rural land and greenspace South of the Fraser is becoming more scarce as redevelopments crop up, while farmers’ markets in Metro Vancouver are forced out of their spaces and industrial developers struggle to find land in their price range.

A risk management seminar at the annual general meeting of the BC Association of Farmers’ Markets (BCAFM) in March highlighted the challenges markets around the province face from redevelopment activities. A case in point is the Ambleside market in West Vancouver.

The market moved from Ambleside Village to its current location in Ambleside Park near Grosvenor Americas’ site in the 1300-block of Marine Drive in 2016. Now, as Grosvenor begins construction, it’s seeking a new location.

West Vancouver council rejected a proposal on February 6 that would have moved the market to the West Vancouver Community Centre. Instead, council directed staff to assist the market to relocate within Ambleside.

The situation isn’t unique. Esquimalt’s market also faces uncertainty as Aragon Properties Ltd. moves forward with Esquimalt Village. A survey of BCAFM members indicates that a third of B.C.’s 160-plus farmers markets lack “a stable, permanent location.” These include the eight Vancouver markets operated by the Your Local Farmers Market Society, which saw $8.5 million in sales last year.

“Our markets have been subject to both temporary and permanent relocations due to this lack of permanency, which have without exception had a negative impact on the businesses of our farms and producers,” said Tara McDonald, the society’s executive director.

Avison Young reports that a finite land supply is pushing the Fraser Valley beyond the means of some industrial developers.

“This tightening land supply is also boosting land prices to a point where it is cost prohibitive for many industrial operators and smaller developers to acquire development sites,” the brokerage reports.

[Business in Vancouver]


Edmonton commercial sales increase sets framework for recovery – Western Investor

Alberta’s capital city may be slowly rebooting after taking a sizable hit to its commercial market from the decline in oil price – however, it depends which sector you’re examining. Overall, sales volumes increased 12 per cent in 2016, but some markets are still lagging behind the progress.

The trends for 2017 were seen in 2016, the key being a building momentum  as the year unfolded, finishing off with an 81 per cent year-over-year increase in the fourth quarter, reports Altus Group.

Three asset classes saw their total transaction value increase in 2016. The lead was the retail sector, which had its best year since 2013, with 101 transactions worth a total of $524 million, up a startling 172 per cent from a year earlier.

The retail strength, in fact, has shaken dust off some downtown development plans. This includes a new look at the Quarters, 100 acres that extend east from 97 Street to 92 Street and south from 103A Avenue to the river valley.

Right now it is a modest mix of commercial space and low-income homes with a population of about 2,400. City of Edmonton planners, however, envision it becoming an “environmentally sustainable, walkable, diverse community” with chic shops, office space and homes for 20,000.

While the overall vision has stalled, some investors have stepped in to push it forward.

Jim Olivieri, the owner and founder of National Cappuccino, has bought and renovated an aging building near 102 Avenue and 9 Street into a retail centre. The facade was rebuilt, the bricks were washed, windows added, and the construction was brought up to code. The building, steps away from the Edmonton Art Gallery and the Royal Alberta Museum, completed renovations this year. “The Quarters has lots of potential,” Olivieri said.

Sales of rental apartment buildings in 2016 also send a warning signal of what to expect in the multi-family sector in 2017. Sales and volume were down, with 61 transactions worth $336 million, a 12 per cent decline from 2015.

Edmonton landlords are feeling the sting of the economic slowdown. According to the latest Canada Mortgage and Housing Corp. rental market report, the rental vacancy in Edmonton reached 7.1 per cent in 2016, compared to a Canada-wide average of 3.7 per cent. Average rents have already dropped about 2 per cent.

[Western Investor]


Limited supply or ebbing demand: Metro Vancouver apartment sales decline – Western Investor

Metro Vancouver’s rental apartment sales are declining as they are in Edmonton. However, prices are still considerably higher and unlike Edmonton, there is a shortage of available units that may push availability out of reach of many interested landlords.

For all of 2016, sales of rental apartment buildings across the Lower Mainland tallied $1.1 billion, according to the Real Estate Board of Greater Vancouver, which was down 18.2% from the record pace of a year earlier.

However, a Colliers International study suggests that a lack of supply was the main cause of the sales decline.

“Although overall supply diminished, significant demand was still evident as price-per-unit values for every sub-market in Metro Vancouver increased by 6% to 35%, with an average increase of 26% for Metro Vancouver,” Colliers reports.

According to the Colliers’ survey, the average price per rental apartment spiked 35% in the Tri-Cities region to an average of $228,164 and increased 30% in Burnaby to $272,279 compared with 2015.

In Vancouver, which accounted for 64% of all sales in 2016, the average per-suite price increased 19% from a year earlier to $405,108.

Values of North Vancouver apartment buildings have also grown exponentially, as per-unit values had increased 24% from 2015 and more than 50% since 2014, Colliers reports.

However, some prices are dropping as sales soften. On March 21, HQ Commercial’s Goodman team dropped $800,000 off the listing price of a 10-suite apartment building on Hudson Street in Vancouver’s Marpole neighbourhood. The 11-year-old building is now listed at $4.2 million, or $420,000 per rental suite.

[Western Investor]


Tax cools real estate sales – but not prices – The Burnaby NOW

Since the foreign buyer tax was implemented in August, media has been awash with headlines claiming the Metro Vancouver real estate bubble had finally burst. Is this true? Well, the answer lies in which municipality and market we’re talking about. The Burnaby NOW reports that although the number of sales in the city has decreased, prices remain not as effected – particularly in the condo market.

The real estate board data also shows benchmark prices in all sectors of Burnaby’s real estate market rose between 2016 and 2017, including the detached sector, which saw the highest post-tax decreases but became nevertheless pricier year-end, as indicated by the MLS Home Price Index.

“The tax greatly impacts detached and luxury sales,” says Realtor David Song. “Sellers have reduced their prices and the volume of transactions have lowered. We have seen few multiple offers and competitive biddings that were commonplace prior to the tax.”

He adds condo sales have not been significantly affected, as the tax translates to less-burdensome totals when applied to lower-cost properties.

“Presales of new highrise developments continue to be in hot demand in certain areas, such as Metrotown and Brentwood,” says Song.

Song notes Burnaby real estate prices soared in recent years due to high demand from both newcomers and investors, and that the majority of investors are local.

Another Realtor, Michael Fong, believes the tax has brought uncertainties to the market.

“In my opinion, many are waiting to see the policy’s effects before making a decision, particularly if the transaction involves a pricier detached propert,” he says. “On the other hand, many sellers still need time to adjust to the new lower demand, because many still base their valuations on their neighbours’ selling prices from pre-tax 2016. This may be why we see more of a drop in demand than prices.”

[The Burnaby NOW]