Demand for industrial space in Vancouver is so voracious that CBRE believes it could run out of land in a few years. According to commercial real estate firm CBRE, a confluence of e-commerce as well as Vancouver being situated between the Pacific Ocean and mountains is resulting in surging real estate prices and demand for warehouse space.In fact, industrial rents increased 16% last year, to a record of $11.86 per square foot. “There is a critical shortage of industrial land in Vancouver,” CBRE Canada’s Vice Chairman Paul Morassutti told Bloomberg.“It was our estimation that they could potentially, literally run out of industrial land by the early 2020s.” Meanwhile, in Canada’s largest city the industrial market had a robust showing in 2018.While rents did not rise as much as they did in Vancouver, the $7 per square foot increase, supply is well behind demand.To finish the year, Toronto’s downtown has North America’s lowest office vacancy rate (2.7%), and rents in the most popular towers surged a 14%, reaching $35.37 per square foot.To catch up to demand, a more flurry of new supply is expected, however, the timing might be precarious as it should align with the next recession. Commercial real estate investment kept inclining, setting a record in 2018 when it hit $49.3 billion—68% above

British Columbia’s moderating housing market will have a domino effect of overall weakness in the provincial economy, the Conference Board of Canada predicted in its study released last week. Some ongoing energy megaprojects might help alleviate some of the pain, according to the analysis.Among the most promising of these is a $40-billion project based in Kitimat, B.C.by LNG Canada and five investment partners. “With the housing market slowing, investor approval of LNG Canada’s liquefied natural gas terminal and pipeline in late 2018 came at an opportune time for the province.The first phase of the development will provide a substantial boost to the province’s real GDP between now and the middle of the next decade,” the Board stated in its report, as quoted by Business in Vancouver. Nevertheless, the market should still brace for considerable real GDP growth slowdown, with housing likely to drag down the economy well into next year. Read more:Further cooling policies still needed – B.C.Finance Minister[1] The Board warned that the province’s economy will shrink from 2.6% in 2018 to 2.5% this year, and then down to 2.4% in 2020.These would be noticeably lower than the 2014-17 period, which enjoyed an average of 3.2% growth. Said slowdown will make itself especially felt in the largest cities,

The growing number of tech companies taking roost in large offices situated at major cities nationwide will ensure the commercial market’s resiliency in the event of a recession, according to CBRE’s Paul Morassutti. “Tech has become so ubiquitous across Canadian industries [that] the true impact the tech sector has on Canada’s economy has been understated,” Morassutti said, as quoted by Real Estate News Exchange. This is quite apparent in Toronto, which is considered one of the global leaders in high-technology innovation, particularly research in artificial intelligence. At present, around 10 million square feet of office space is under construction in in the city, but around 58% of that volume has already been pre-leased.Tech firms represented fully one-fifth of these pre-leases, CBRE noted. Industry movers like Microsoft are now betting on the city’s long-term prospects, if its move into a 132,000-square-foot lease at the new CIBC Square in downtown Toronto is any indication. Read more:Toronto is a top commercial investment destination right now[1] “Tech companies anchoring new buildings is something we have virtually never seen before,” Morassutti stated. “Over the past 10 years, tech has grown at more than 2.5 times the pace of the energy sector and three times the overall economy,” he added.“In real estate,

The cement sector is the second-largest industrial emitter of carbon dioxide, according to the International Energy Agency, and given the building boom that’s gripped the country’s largest cities, it is unlikely Canada will reduce emissions below 2030 targets. However, there could be a solution. Mass Timber technology is being touted as a solution that will reduce carbon emissions and save consumers money.According to Erik Andreasen, vice president of Adera Development, which has been building exclusively with wood for 50 years in Metro Vancouver, there are several benefits to constructing buildings with wood instead of concrete. “The homes are quieter than concrete and the homes are as solid as concrete homes, but they have better performance,” he said.“Even when it comes down to fire, our wood doesn’t burn.We perceive smart wood to be the building technology of the future and we can compete with concrete pound for pound, dollar for dollar, and there are a number of benefits for customers.” Last year, Adera finished Virtuoso, a condo project at the University of British Columbia that uses 1,120 cubic metres of lumber for its cross-laminated timber portion.Every cubic metre sequesters 220 kilos of carbon, which is the equivalent of 245 tonnes of carbon dioxide.For context, the average automobile produces 4.5 tonnes of carbon annually. “We have

Condo supply in the country’s largest markets might see significant increases in the near future, but on the whole, young professionals and starting families will still prefer single-detached homes, a Globe and Mail politics/business columnist has argued. While well-intentioned, a federal policy focused on boosting the availability of low-cost condo units in downtown areas “may have unwittingly encouraged urban sprawl by forcing more Canadians to look further to the exurbs to realize their dream of a owning a detached, single-family home with a yard,” Konrad Yakabuski wrote in his latest column. “Extending the amortization period on insured mortgages, easing the stress test introduced last year or increasing the $750 tax credit for first-time buyers might encourage more millennials to purchase a condo, the only type of property within financial reach,” he added.“But since most millennials ultimately aspire to purchase of a single-family home, it’s worthwhile asking whether Canada needs any more condos right now.” Read more:Could ‘micro living’ catch on in Toronto?[1] One should look no further than Greater Montreal to witness evidence of the phenomenon.Updated numbers provided by the Quebec statistics agency showed that nearly 24,000 residents – a significant proportion of which were young households – moved from Montreal to the suburbs and exurbs in 2018.This was

Of Canada’s largest sectors, it was e-commerce that accounted for much of the demand for Vancouver’s commercial and industrial space, according to CBRE Ltd. Specifically, the market’s warehouse spaces attracted a majority of the e-commerce firms and ventures taking roost in the city. Industrial rent rates have consequently grown by 16% annually to reach a record-high $11.86 per square foot last year – the highest among Canada’s urban commercial property markets in 2018. In contrast, Vancouver’s 1.5% industrial vacancy near the end of 2018 was among the lowest in North America. Read more:Canadian commercial investment to intensify this year[1] Tight supply and historically low unemployment rates will foster sustained demand for much of 2019, according to Avison Young Canada Inc.in its report released in January. Nearly 4.9 million square feet of industrial space was under development across Metro Vancouver as of the end of last year, the analysis added. CBRE warned that Vancouver is in danger of running out of industrial land soon, if these trends hold. “There is a critical shortage of industrial land in Vancouver,” CBRE Canada vice chairman Paul Morassutti told Bloomberg. “It was our estimation that they could potentially, literally run out of industrial land by the

With housing deceleration nationwide becoming especially apparent in January, observers warned that the strict lending rules introduced last year might have had a more drastic impact than anticipated. “The decline in last month above and beyond what was observed a year ago is indicative of the fact that the markets are not merely reacting to new regulations, but the markets have embraced a more systematic response that is characterized by fewer transactions and lower prices,” Ryerson University associate professor Murtaza Haider and real estate industry veteran Stephen Moranis wrote in a recent analysis for the Financial Post. January sales activity shrank by 4% annually, following an already noticeable 2.4% decline during the same month last year. “The January 2019 statistics offer the first opportunity to compare the annual change in housing market dynamics after the stress test came into effect,” Haider and Moranis stated, adding that “the housing market slowdown is deeper rooted than a direct and immediate reaction to policy interventions.” Read more:Toronto and Montreal luxury condos surge in value[1] More importantly, a possible domino effect stemming from the largest banks’ mortgage operations should not be ignored. “The weakness in housing markets also affects mortgage lending, a business The Big Five banks continue to dominate in Canada.The continued

Amid a marked slowdown in nationwide activity recently, the Greater Toronto Area has actually experienced a considerable year-over-year increase in new home sales, according to the Building Industry and Land Development Association. Citing data from Altus Group, BILD announced earlier this week that GTA new home sales volume increased by 14% annually in January, reaching 1,362 transactions. A deviation from this trend was the single-family segment, which saw its sales settle at levels 53% lower than the 10-year average for this asset class.New condo apartments comprised a notable portion of last month’s activity, with sales being only 5% lower than the 10-year average. Despite the road bumps, BILD president and CEO David Wilkes deemed the January numbers as a welcome change. “It looks like the market is starting to return to typical levels after a particularly difficult year,” Wilkes said.“With the spring budget coming up, we are calling on the federal government to take steps to make it easier for first-time home buyers to get into the housing market.” Read more:Higher-density housing to dominate West GTA soon[1] “The improvement in new home sales over last January is consistent with our outlook for somewhat higher annual sales in the GTA this year, following the drop in 2018.” Altus Group

B.C.’s Ministry of Finance has announced the launch of the Condo and Strata Assignment Integrity Register, the latest thrust in its efforts to crack down on the speculation that has inflamed the province’s housing prices to unprecedented heights. Finance Minister Carol James said that the platform, which is the first of its kind in Canada, will ensure fairness and transparency in the industry. “For too long, speculators and tax evaders have been taking advantage of loopholes in our real estate market, driving up prices and shutting British Columbians out of the market,” James said, as quoted by The Canadian Press. One of the registry’s goals is a mandate upon condo developers to collect and report the identity and citizenship of any buyer assigning their purchase contract of a condo to another party (frequently at a higher price point) before the project that the unit is associated with reaches completion. Read more:Further cooling policies still needed – B.C.Finance Minister[1] The reports will be filed by developers every quarter, with the first (covering January 1 - March 31) due April 30. “The B.C.government will use this information to ensure that people who assign condos are paying the appropriate income tax, capital gains and property transfer tax,” the news release

Good news for luxury condominium owners in Toronto and Montreal. According to a luxury housing market report from Royal LePage, the condo markets in Canada’s two largest cities appreciated 10.2% and 8.4%, respectively, through the 12 months preceding January 31.The average price in Toronto reached $2,268,571, and in Montreal it rose to $1,295,401. The market for luxury detached houses in Toronto witnessed a 40% drop in sales activity and, consequently, average prices rose a paltry 3.1% to reach $3,575,702.Montreal’s luxury housing market appreciated 5.4% year-over-year, hitting $1,680,942. The luxury market in Vancouver, however, has seen better days.During the aforementioned period, luxury condominium sales in Greater Vancouver decreased 32.2%, as did prices by 0.6%, for an average of $2,680,064.Greater Vancouver’s luxury housing market also dropped 1.7%, but the cost is still Canada’s highest at $5,751,928.The report read: “Across Canada’s five largest cities, Greater Vancouver was the only city to post a decline in median luxury home prices.The number of luxury houses trading hands declined over the past two years, a trend that initially began with the introduction of measures to cool the city’s real estate market in 2016.Luxury home values have dipped but remain remarkably steady as many Vancouverites refuse to sell at what they perceive as a discount.Exasperating soft demand, Chinese nationals, an important luxury buyer

Policies that cultivate further housing slowdown are still needed to ensure greater affordability in B.C., Finance Minister Carole James said last week. The statement came amid official reports of considerable slowdown in the province’s home price growth and sales activity, after several changes were introduced last year. Among the most notable of these regulatory revisions were levies aimed at speculators and hiking the taxes on foreign buyers, which is part of the B.C.government’s aim to diversify the economy and “not simply relying, for example, on a speculative real estate market which doesn’t help grow a sustainable economy,” James said, as quoted by Bloomberg. “I think there’s more to go.I don’t think anyone in the Metro Vancouver-area would classify housing as affordable at this stage.” Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] B.C.is not looking at possible housing risks as a major long-term threat, considering that it is projecting new borrowings to grow to $7.5 billion in the coming fiscal year, up from $6.3 billion in the current year. The province’s fiscal plan, as presented in documents last week, is estimating economic growth to hit 2.4% this year, outstripping the 2.2% in 2018. James noted that contrary to doomsayers’ fears of long-term lethargy, this trend

High-capacity multi-family housing will soon become the primary budget choice in the Greater Toronto Area, especially in the western part of the region. “Freehold properties remain the choice of most purchasers in Halton Region and Toronto West,” RE/MAX of Ontario-Atlantic Canada executive vice president Christopher Alexander said.“The same is true to a lesser extent in Toronto Central, but condominiums continue to gain ground.” “Just over one in three properties sold in the GTA was a condominium in 2018 and that figure is higher in the core.As prices climb in both the city and suburbs, the shift toward higher-density housing will continue, with fewer single-detached developments coming to pass.” Indeed, Halton Region – which includes Burlington, Halton Hills, Milton and Oakville – represented as much as 10.1% of the GTA’s residential property sales as of the end of 2018, growing by 2.3% in the 5 years prior.Toronto West also climbed by nearly 1% during the same period, to a 10.5% share. Read more:TREB offers positive outlook for sales, price growth in 2019[1] Much of Halton Region’s activity stemmed from popular clamour for affordable housing, which led to greater and faster construction in the area. “Product was coming on-stream at a time when the Greater Toronto Area (GTA) reported its lowest

Few real estate investors aren’t sweet on student housing, and for good reason, but which regions in Ontario have the most to offer? The owner of Strauss Investments says cities with satellite schools are a good net because of their small but concentrated markets. “Laurier and Nipissing universities have satellites in Brantford,” said Strauss, who’s also a sales representative with Rock Star Real Estate.“In Kitchener, there’s the McMaster University Waterloo Regional Campus, and it’s its own little pocket market.Satellite schools offer niches that let smaller investors get in there.All you have to do is provide good product and you get lots of action without much competition.” Waterloo, on the other hand, has a glut of inventory largely driven by foreign investment, but Strauss noted that the accommodations are superlative.Nevertheless, the closer the property is to the University of Waterloo, the fewer problems investors will have finding tenants. Strauss warns that some cities have certain stipulations, like the number of rooms permitted, that can hinder the investment’s potential.However, he’s bullish on London and Hamilton. “Purpose-built is obviously better than just taking an old house and converting it, but in Hamilton the areas near Mohawk College and McMaster University are very student-friendly.There are a lot of rental opportunities, and at the brokerage I work at

New data from the Canadian Real Estate Association indicated that Montreal’s housing market is benefiting from strong growth across all crucial metrics – and might even have enough of a boost to outstrip Vancouver’s pace soon. In January, Montreal’s median home sale price went up by 6.3% annually, reaching $349,300.While the price was still far below Vancouver’s $1.02 million average, the latter’s price levels actually fell by 4.5% during the same period. Fuelled by a robust economy and immense purchasing power in an environment of relatively low housing prices, the Montreal market’s sales volume also enjoyed a 7.1% increase from December 2018, which was the fastest month-over-month growth in a decade. In comparison, activity in Canada’s hottest cities during the same time frame was just around 1.2%, while the overall national increase was at 3.6%. Read more:Bidding wars now more frequent in Montreal[1] The total dollar value of property transactions (seasonally adjusted) in Montreal went up by 18% annually, up to $1.63 billion.Meanwhile, Vancouver’s fell by 42%, down to $1.7 billion. While this might be a warning sign to cautious would-be investors, the overall lower costs of living in the city – especially when compared to Canada’s most inflamed markets – considerably reduce the risk of Montreal suffering from

A Ryerson City Building Institute report exploring ways to solve Toronto’s affordability crisis suggests micro living could catch on in the city. The report, called Rethinking the Tower, mused about the construction of micro units in a city dominated by condominiums.Micro units have become popular in New York City and Seattle because rental and sale prices correspond to unit size, and in a city like Toronto it could go a long way towards solving affordability issues. “Well-designed rental or ownership micro units offer an opportunity to deliver more affordable homes to the market, particularly in central locations where land costs can be a significant barrier to affordability,” read the report.“Analyses by the Urban Land Institute (ULI) and Colliers have found that micro units in American cities lease at monthly rents 20% to 30% lower than conventional apartments, although they cost more per square foot in rent than conventional rental units.” A micro unit is roughly 350 square feet in area and has an in-unit bathroom and kitchen, but designs is key to its marketability. “Many developments will boast flexible furniture systems, high ceilings, large windows, built-in storage and/or convertible furniture,” continued the report.“Some have also bundled micro units with shared amenities and services such as storage, lounge, areas and outdoor space.Micro units are often marketed