On the heels of steady economic recovery, Alberta is grappling with a considerable drop-off in its real estate investment volumes, according to latest Altus Group data covering Q2 2019.
In Calgary, total investment volume for the first half of 2019 was $1.2 billion. Only $426 million came from the previous quarter, translating to a dramatic 56% plunge from the same period in 2018.
“This was a reflection of both lower sales volume and deal count, with 99 transactions being the lowest quarterly total seen since Q2 of 2016,” Altus explained.
However, “while the second quarter results showed a steep decline in sales volume from the same quarter last year, it’s also noted that the investment totals for the market were only down by 26% year-to-date compared to 2018,” Altus Group data solutions manager Ben Tatterton added.
“It appears that the market continues to remain in a holding pattern as we move into the second half of the year.”
The apartment sector saw 54% year-over-year growth, up to $84 million in transactions. This segment, as well as the industrial market, each accounted for 20% of Calgary’s Q2 total investment volume.
“For the first half of 2019, the apartment sector was up by 150% compared to the first half of 2018. The top transaction of the quarter was Cedarbrae Manor, which sold for $18.2 million to Mainstreet Equity Corp.,” Altus reported.
Meanwhile, the residential and ICI land markets both registered 16% of the second-quarter performance. The office sector represented only 10%, just a bit higher than the hotel sector.