Land sales in Metro Vancouver see 70% drop: report

Dec 11 2019, 2:11 am

A recent investment property sales report by Altus Group notes land sales volumes in Metro Vancouver took a 70% dive during the first half of 2019 compared to the same period in 2018.

This difference was largely a result of a significant drop in residential land transactions, especially in high-density properties.

Interestingly, all subareas, with the exception of Richmond, contributed to the decline in total new home sales in the regional market during the first half of 2019 compared to the first half of 2018.

The subareas of Burnaby, the Tri-Cities, and New Westminster saw a major decrease in activity over the same period, but the subareas of Surrey, White Rock, and Delta performed relatively well, increasing their regional share of total new home sales from one-fifth to about one-third in just a year.

Based on the commercial real estate services company’s survey, over the last five years, 40% of recent homebuyers were under 35 years old, 22% were between the ages of 35 and 49, and 31% were between the ages of 50 and 64.

The most recent first-time homebuyers in the region do not have high-ratio mortgages, with about two-thirds making down payments of at least 20%. Just one in six recent first-time homebuyers put down less than 10% of the purchase price, and another one in six received financial assistance from family.

Altus Group

Altus Group

Altus Group

While the combined sales volumes for industrial, commercial, and institutional properties also dropped over the first two quarters, their declines were not as pronounced as the plummet experienced by residential.

Industrial investment on its own decreased by 21% over the first half of 2019 compared to the same period last year. With that said, nearly 3.3 million sq. ft. of industrial space was added to the region in the two years ending in the second quarter of 2019, but this was less than the demand for additional space over the same period, with the vacancy rate dropping to just 1.2%.

Currently, there is 4.1 million sq. ft. of industrial space under construction, which represents just 1.5 years of supply due to exceedingly high demand.

Altus Group

Altus Group

Office investment actually went up by 51% in the first half of 2019 over the same period in 2018, and industrial investment experienced its seventh consecutive year-over-year increase to a record level of $1.4 billion.

Over the two years ending in the second quarter of 2019, just 500,000 sq. ft. of office space was added to the market, equivalent to one-third of the amount recorded three years ago. There continues to be a shortage of office space, which is evident by the region’s office vacancy rate of 4.4% at the end of the first half of 2019 — the lowest vacancy level since 2008.

However, as of the middle of the year, there is approximately six million sq. ft. of office space under construction in the region, with three-quarters located in downtown Vancouver and just over half already leased.

Altus Group

Altus Group

Kenneth ChanKenneth Chan

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