The commercial real estate market in Canada enjoyed a strong 2017 with investment volumes reaching a record amount of $32 billion, although the situation this year could be different.
Industry professional Bill Argeropoulos said the market has been “late in the cycle,” which causes the inevitability of a slowdown despite good market fundamentals in real estate.
Office properties will record mixed vacancy rates, according to Avison’s recent commercial real estate forecast. Out of 11 surveyed markets near the end of 2017, vacancy rates in five regions exceeded the national average of 11.8 per cent. An uneven ratio of supply and demand has led to a higher national vacancy rate.
Argeropoulos said the industrial sector could be the strongest market in terms of single-digit vacancies, demand and growth of rental prices. Office deals in some markets can still be a lucrative venture. If you are looking for an office building for sale in Vancouver, keep in mind that the city has a 1.6 per cent vacancy rate, which could affect the selling price.
The downtown office vacancy rate in Vancouver in 2017 fell to its lowest since 2013, down by 50 per cent to just 5 per cent. This may continue until 2021, as demand remains on the rise in the city. Developers have also taken advantage of a high demand by launching new office projects.
As a result, strata prices and rental rates may reach an all-time high in 2018. Big-ticket transactions for office space in the previous year will contribute to higher prices as well.
Whether or not Canada’s commercial property market will begin to slow down in 2018, you should consult first with a property investment firm to make a wise decision on your real estate ventures this year.