Ashley Ford
Province
Vancouver’s downtown office-vacancy rate surpassed Calgary’s to become the lowest in Canada during the third quarter. – BLOOMBERG
House buying is rampant, office space is super tight, and the provincial economy seems impervious to the “shakes” going through other economies.
The British Columbia Real Estate Association reported yesterday that residential sales volume on Multiple Listing Service across the province climbed 25.9 per cent to $4.33 billion in August, compared to the same month last year.
Further evidence of an irresistible economy comes from the latest office numbers from CB Richard Ellis showing Vancouver “enjoyed” the tightest downtown office-space vacancies in Canada in the third quarter.
The level dipped to a new record low of three per cent, surpassing Calgary as the tightest downtown office market. And it could get tighter, as Vancouver only accounts for six per cent of all new office construction across Canada, compared to Calgary that accounts for over half, at 51 per cent.
Vacancy ranges from a low of 2.6 per cent along the Broadway corridor to a high of 22.4 per cent in Surrey.
At a combined 10.9 per cent vacancy, Vancouver‘s suburban markets offer the bulk of available space across the Lower Mainland. The average national vacancy rate for downtown markets is 5.7 per cent, historically low for the country.
On the housing front, buying and construction thunders on.
Residential unit sales increased 12.6 per cent to 9,833 units in August over a year ago with the average MLS residential price hitting $439,931, up 11.8 per cent.
There were no summertime blues this year as home sales climbed 14 per cent from June through August, compared to the same period last year. Year to date, B.C. home sales are up 4.7 per cent to 74,939 units.
“Despite eroding affordability, home sales are on a near record pace,” said BCREA chief economist Cameron Muir.
“Preferred retirement locations, such as Vancouver Island, the Okanagan and Kootenays, have experienced the largest increases in home sales this year.”
There is some meagre comfort for buyers in the numbers, but not much. Muir noted that, while home sales are up, the average home price across the province is climbing at a year-over-year rate of 12 per cent, down from a high of 21 per cent in June 2006.
“Barring any unforeseen shock in the market, such as rapidly rising interest rates or a meltdown of B.C.’s economy, less upward pressure on home prices is expected over the next 24 months,” he said.
And, for a welcome change, Vancouver is no longer the price-increase setter. In the Kootenay region the average cost of a home has risen by 30.6 per cent in a year to $298,420.
In Kamloops prices have soared by 26.8 per cent to $286,253 over the same period, while the South Okanagan rose 21.7 per cent to $346,596. By comparison, Greater Vancouver prices rose a more modest 12.8 per cent to $587,483.
© The Vancouver Province 2007