The second quarter (Q2) of 2023 saw a significant decline in the Lower Mainland’s commercial real estate market, with sales and dollar volumes experiencing year-over-year decreases. According to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV), there were 280 commercial real estate sales in the Lower Mainland during Q2 2023, marking a 56.5 percent decrease from the 644 sales recorded in Q2 2022. Additionally, the total dollar value of commercial real estate sales in the region was $1.76 billion in Q2 2023, a 54 percent decrease from the $3.831 billion seen in Q2 2022.
The decline in sales and dollar volumes can be primarily attributed to the high borrowing costs in the market, which have been described as the highest in over 10 years. Andrew Lis, REBGV’s director of economics and data analytics, noted that the current landscape for monetary policy suggests that the commercial real estate market is likely to continue along this trajectory for the remainder of 2023.
Analyzing the Q2 2023 activity by category, the industrial sector witnessed a 59 percent decrease in land sales compared to Q2 2022, with the dollar value of industrial sales dropping by 32.4 percent. Office and retail sales in the Lower Mainland experienced a 51.3 percent decline, with the dollar value of such sales decreasing by 63.4 percent. The multi-family sector also saw a downturn, with a decrease of 38.7 percent in land sales and a 53.2 percent decrease in the dollar value of multi-family sales. Additionally, commercial land sales decreased by 62.6 percent, and their dollar value dropped by 57.6 percent.
These figures indicate the challenging conditions faced by the Lower Mainland’s commercial real estate market in Q2 2023.
– Commercial Edge, Real Estate Board of Greater Vancouver