There were significant struggles for the Vancouver real estate market in the first half of 2019 according to new data from the Altus Group.
Its report shows that the office sector was the outlier in a market characterized by weaker investment volume and affordability challenges for new home buyers.
Investment property sales were less than half of those in the same period of 2018.
Residential Land investment slowed in 2018, decreasing 16% from 2017, and in the first half 2019 was off to a very quiet start with investment totals down 70% from 2018.
While the industrial sector saw nearly 3.3M sq. ft. of space added in the 4 quarters ending in Q2 2019, it was less than the demand for additional space over the same period resulting in a 1.2% drop in the vacancy rate in mid-2019.
Three was a tightening of supply for the office sector with only 500,000 sq. ft. of space added in the 4 quarters ending in Q2 2019, a third of the amount of three years ago. It led to the office vacancy rate is at its lowest level since 2008 at 4.4%.
And the retail sector saw property sales soften 6% in 2018 from the record set in 2017.
Home sales
Total New Home Sales were down for the second year in a row in 2018 with sales in projects of 20 or more units slipping 10% from 2017. New home sales slowed further in first half of 2019 with both single-family and condo apartment sales only half the levels from the same time in 2018.
The new condo apartment sector saw increased supply after the tight conditions of recent years; 105 condo projects were launched in 2018 for a total of about 18,000 units and another 32 projects launched in first half of 2019.
Home buying intentions are down among current homeowners, but renters are hungry to become homebuyers.
However, affordability remains a challenge for first-time buyers who are typically buying homes 20% below the overall average price and borrowing more than 5 times their average income.
Among recent buyers, 40% were under 35.
The full report is available here.
