Outlook for Metro Vancouver Real Estate Industry in 2024: Slow Start Expected to Pick Up

Real Estate Transactions Down in Metro Vancouver, But Optimism for Recovery Looms

As the real estate industry in Metro Vancouver navigates through a slow start to the year, experts anticipate a shift towards recovery in the second or third quarter of 2024. The region has seen a significant decline in both the number of transactions and dollar volume compared to the same period last year, attributable to a scarcity of high-quality assets and a cautious buyer pool.

Kirk Kuester, executive managing director at Colliers Canada in Vancouver, highlighted the subdued market activity in the first two months of 2024. Transaction volume above $1 million was down 49% compared to 2023, with only 93 sales totaling $591 million in January and February. The decline in sales reflects a challenging market environment, but industry professionals remain hopeful for a turnaround as the year progresses.

Jessica Toppazzini, managing director for Avison Young in Vancouver, characterized the market sentiment as “patiently optimistic.” She noted a strong preference for retail and industrial assets among investors, citing the steady demand for storefront properties. Despite the sluggish start, Toppazzini believes that the fundamentals driving the market will lead to a stronger performance in the coming months.

The industrial market in Metro Vancouver has also remained competitive, with lease rates showing a modest increase year over year. Edgar Buksevics, executive vice-president at Jones Lang LaSalle Real Estate Services Inc., pointed to a significant transaction involving a Burnaby warehouse leased by Amazon Inc. as a testament to the enduring appeal of large-scale deals in the region.

While challenges persist, experts are optimistic that the gap between asking and bid prices will narrow in the near future, paving the way for increased transaction activity. As office vacancies rise in downtown Vancouver, there is a growing interest from opportunistic investors looking to capitalize on the market conditions.

Despite the current lull in real estate transactions, industry professionals remain confident in the long-term prospects of the Metro Vancouver market. With cautious optimism and a resilient outlook, stakeholders are poised for a potential recovery in the latter half of 2024.