The strong economic situation coupled with land shortage in British Columbia is hiking up values in the commercial real estate sector across the Lower Mainland. Commercial real estate values increased by 47% in 2016 and recent figures released by the Real Estate Board of Greater Vancouver explains that commercial real estate sales were close to $13 billion last year which is high than the $8.8 billion recorded in 2015.
There was a further 21% increase in sales activity in the commercial real estate area and Dan Morrison president of the REBGV stated that the increase in sales is mainly as a result of the vibrant economy in B.C and Vancouver. The rise in the commercial sector is just a mirror of a similar trend in residential properties. In the recent years, residential real estate properties in Vancouver have been moving sky high which was the main reason for the B.C government to introduce a tax on foreign investors.
Prior to the tax, foreign capital had been a massive contributor to the growth of the provincial economy but following the implementation of the tax in August, there had been less interest from foreign investors in Vancouver properties. However, last week the government made changes on the tax, exempting foreigners who come to the province through the provincial nominee program. Although Morrison was question s to whether the tax also had an influence on commercial real estate properties, he responded that it is still unknown as there is little data on present any evidence.
However, the tax had significant effects on the economy. Land sales also increased on the economic growth with commercial land sales soaring to $7.2 billion which is an 80% increase since 2015.