Posted by: Daryl & Wendy Ashby | December 31, 2010

Market Beat Vancouver

British Columbia has embraced 2010. With the recession now passed, the Winter Olympics a success, and strong economic growth anticipated in the future.

BC is poised to keep pace with Canada’s expected GDP growth through 2011, projected at 3.3% and 3.2%.

Both the BMO Capital Markets and RBC Economics agree that a leading factor in BC’s economic recovery is the rebound in commodity prices and demand. Both oil and forestry product pricing have seen tremendous growth since their recessionary lows. RBC reports that lumber prices have recently hit a four-year high after falling to a 19-year low only one year ago.

Despite these signs of recovery, overall vacancy in the Vancouver Market continued its upward trend. The current office vacancy rate is 8.4%, up from 7.9% in the first quarter and 6.9% a year ago. A leading cause of this increase in vacancy is the large number of new completions coming to the market in the suburban markets. More than 565,000 square feet of space has been brought to market since the beginning of 2010 — much of which is situated in Burnaby (80%).

BC’s unemployment rate was projected to drop 40 basis points to 7.2% through 2010, with annual employment growth of nearly 2.0%. This employment rebound has initiated expansion of tenant space requirements and is forecasted to continue through 2011. With no new construction in the CBD, the market will continue to tighten.

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