The Real Estate Board of Greater Vancouver has released stats for August which show mixed results amid a general slowdown of sales activity since May of this year. A sample of selected areas in Metro Vancouver shows pricing as flat or in decline during the summer.

Year over year pricing is in slight decline pretty much across the board, with the exception of some of the Fraser Valley suburbs which did not exhibit significant price increases over the past two years. Pitt Meadows condos, for example, have shown a slight increase of 1.2% since May 2012. Other markets with much higher levels of new inventory, such as North Burnaby, have declined about 2.5% over the summer, and have remained relatively flat since 2010.

Prices are continuing to come off on the Westside of Vancouver, which was one of the hottest markets in 2010/2011 and was the basis for much of the commentary on the health of the overall residential market.

The HPI for single family homes on the Westside declined 2.5% in August alone, and is down over 6% since May 2012. The HPI remains 20% above where it was in August 2010, indicating that with a prolonged lack of sales activity, there may be a further decline in store. Between June and August, sales volumes were down 50% over 2011.

Metro Vancouver commercial real estate sales reach record $1.42 billion.

Commercial real estate transactions in Metro Vancouver reached an unprecedented six-month total of $1.42 billion during the first half of 2012, breaking the previous record of $1.03 billion set during the first half of 2010, according to a report released Wednesday.

The figures point to a longer-term surge and confidence in commercial land investments, experts say, but belie anxiety over diminishing industrial land availability as it gives way to more apartments and office towers.

Valuations for office buildings in Burnaby have risen over the past ten years amid declining cap rates and rising rental rates. The average value for office building sales in the past two years has been hovering around $200 / SF.

This market is predominantly characterized by larger office complexes, interspersed with smaller local office and strata business park office. Newly built buildings in the core areas such as Glenlyon office park and Canada Way corridor have achieved values over $250 / SF, with older product in local residential areas and industrial areas reaching below $100 / SF.

Cap rates have generally decline from an average above 8.0% to decline below 6.50%; a trend consistent with other suburbs in Vancouver.

Investment activity in this market has been relatively constrained given a lack of available product. As we reported in July, Bosa acquired a sizeable office asset located just off Canada Way at Sperling Avenue, for $33,000,000.

In terms of new supply, Metrotower 3 is currently under construction and is expected to complete in 2014. The leasing market remains in favour of tenants with a reported Q2 2012 vacancy rate of 11.2% (source: Colliers).

Building permit values in Vancouver hit $1.1 billion for the first half of 2012, a 39 per cent increase over the same period in 2011.

According to Vancouver mayor Gregor Robertson, over 6,000 jobs were created in the first half of 2012 because of construction activity in the city.

Commercial and industrial construction in the first 6 months of 2012 showed a rise in a year-to-year comparison with the same period in 2011. As of June 30, just over one million square feet of non-residential floor space was approved through building permits.

Courtesy: Journal of Commerce, September 4, 2012