When it comes to residential markets, both Toronto and Vancouver are similar: Both have seen impressive and sales increases that are expected to continue. The commercial market is another story, though.
Toronto reported 392,132 square feet leased of combined industrial, commercial/retail and office space in February. That was down from 796,437 in 2015.
“While the regional economy for the GTA and surrounding Greater Golden Horseshoe has held up quite well relative to other regions in Canada, it is clear that there remains a degree of uncertainty in many sectors regarding the outlook for the next year,” Toronto Real Estate Board President Mark McLean said in a release. “This uncertainty seems to have translated into caution when it comes to firms committing to more industrial, commercial/retail or office space.”
However, things seem more positive on the other side of the country for commercial brokers.
“Financial market jitters offset solid gains from a strong BC economy,” BCREA economist Brendon Ogmundson said in a recent release. “We expect that the economic environment will remain supportive of steady growth in the commercial real estate market.”
It’s an optimistic tone that contradicts some of the gloomier reports for Toronto and, indeed, the rest of Canada.
Office vacancies are on the rise throughout Canada and the commercial industry is expected to see a tough year as a result of low oil prices and an excess retail supply.
“Demand, or lack thereof, will be the biggest story in the office sector,” Paul Morassutti, executive vice-president at real estate firm CBRE said during the RealCapital real estate conference in Toronto late last month.