Foreign buyer tax on Greater Vancouver homes encouraging investors to look to commercial market
KELOWNA, BC, Sept. 28, 2016 /CNW/ - Much of Western Canada continued to experience slower market activity in the first half of the year as regional economies continued to recover from the downturn in the oil sector. In B.C.'s Lower Mainland, by contrast, activity was brisk and prices continued to increase significantly in the commercial property market. The total dollar value of commercial real estate sales in the Lower Mainland in the first half of the year was $7.135 billion, an increase of 94 per cent over 2015, with land the most in-demand property type.
"Demand for commercial property in the Vancouver area remains very high and continues to be driven mainly by local investors," said Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "Over the next several months, we may start to see more interest from foreign investors. As a result of the recent foreign buyer tax on residential properties, buyers who are interested in investing in Greater Vancouver may start to shift their focus to commercial properties."
The commercial real estate markets in Calgary and Edmonton continued to feel the impact of lower oil prices. In Calgary, the number of commercial properties sold during the first two quarters of the year was down 12 per cent from the same period in 2015. The most significant impact has been seen in office space; at the end of July 2016, the office vacancy rate was approaching 25 per cent.
In Edmonton, the number of commercial building and land sales was down eight per cent year-over-year while the value of those sales was down five per cent. This marks the second consecutive year that total sales were valued at less than $1 billion by mid-year. Land sales declined by 40 per cent year-over-year, indicative of a slowing economy; however, the total dollar value of building sales was up 13 per cent compared with the first half of 2015.
"There continues to be demand for good quality product in the Calgary and Edmonton markets, though a full recovery is not expected until oil prices rebound," said Ash. "For investors, there will likely be some good opportunities coming on to the market later this year and next year as owners start to sell off assets."
The commercial real estate markets in Saskatoon and Regina have remained fairly active despite a somewhat softer market caused by the downturn in the resource sector. In both cities, the first half of 2016 saw increased investor interest from Real Estate Investment Trusts (REITs). A well-diversified economy and positive year for the agricultural sector are keeping confidence high in these markets.
In Winnipeg, demand for commercial properties has continued to outpace supply, with investors primarily interested in retail investment properties, industrial properties and vacant land. The market is expected to stay fairly stable and demand is expected to remain strong heading into 2017.
For more information, please visit the 2016 RE/MAX Commercial Investor report.
2016 RE/MAX Commercial Investor Report:
The 2016 RE/MAX Commercial Investor Report includes data from local boards and brokerages. Brokers and agents are surveyed on trends, local development and features.
About the RE/MAX Network:
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence.
Over 100,000 agents provide RE/MAX a global reach of over 100 countries and territories.
RE/MAX, LLC, one of the world's leading franchisors of real estate brokerage services, is a wholly-owned subsidiary of RMCO, LLC, which is controlled and managed by RE/MAX Holdings, Inc. (NYSE:RMAX).
With a passion for the communities in which its agents live and work, RE/MAX is proud to have raised more than $150 million for Children's Miracle Network Hospitals® and other charities.
For more information about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.ca.
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate," "believe," "intend," "expect," "estimate," "plan," "outlook," "project" and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding the future performance of the housing market, the Company's financial and operational outlook, the Company's belief that business fundamentals remain strong, as well as other statements regarding the Company's strategic and operational plans. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward looking statements. Such risks and uncertainties include, without limitation, (1) changes in business and economic activity in general, (2) changes in the real estate market, including changes due to interest rates and availability of financing, (3) the Company's ability to attract and retain quality franchisees, (4) the Company's franchisees' ability to recruit and retain agents, (5) changes in laws and regulations that may affect the Company's business or the real estate market, (6) failure to maintain, protect and enhance the RE/MAX brand (7) fluctuations in foreign currency exchange rates, as well as those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in the most recent Form 10-K filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
SOURCE RE/MAX of Western Canada
For further information: To coordinate interviews, please contact: Western Canada, Wade Paterson, O. 250-860-3628; Kristen Learned, O. 604-688-2505; E: email@example.com