“Financial market jitters offset solid gains from a strong BC economy,” BCREA economist Brendon Ogmundson said in a 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 across the country.
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 last week.
However, B.C.’s market is poised to benefit from a cheerier outlook, according to BCREA.
“Uncertainty in the global economy roiled financial and commodity markets in the second quarter,” BCREA Economist Brendon Ogmundson said. “However, BC’s nation leading economic growth should help to sustain commercial real estate activity through the end of the year.”
The BCREA Commercial Leading Indicator rose to 120 in the fourth quarter of 2015 – a 0.4% year-over-year increase. It’s a small victory but a victory nonetheless.
Part of the cause for optimism on the west coast is due to the strength of the B.C.’s economy, according to BCREA.
Despite fears that the Canadian commercial market is in for a tough year, at least one province may have cause for confidence.