British Columbia investment review

01. 2024 transaction volume increased 56% year-over-year

In 2024, commercial real estate transactions in British Columbia valued at over $5 million totaled more than $10.1 billion, a significant surge from the nearly $6.5 billion recorded in 2023. Residential land and multi-family properties accounted for 44% of this total, reflecting ongoing housing challenges in Metro Vancouver. While benchmark home prices in Vancouver declined year-over-year, affordability remains a major issue for many residents.

Most asset classes experienced an increase in transaction volume compared to the previous year, except for industrial sales, which saw a 26% decline. The office sector recorded the most growth, with annual sales reaching nearly $1.5 billion in 2024, an impressive jump from just over $220 million in 2023.

02. Interest rate decrease brings much-needed relief for buyers

As of March 12, 2025, the Bank of Canada lowered its key interest rate to 2.75%, marking its seventh consecutive cut since June 4, 2024, for a total reduction of 2.25 percentage points. While the lower rates have alleviated financial stress and boosted real estate sales, lenders have remained cautious to prevent excessive borrowing.

The next interest rate announcement is set for April 16, 2025, which will coincide with the release of the Bank’s quarterly Monetary Policy Report. The January 2025 report indicated that inflation was close to the Bank’s 2% target, but trade uncertainties related to tariffs add significant unpredictability for the upcoming report.
 

03. Political uncertainty cause for concern

In June 2024, sales transactions surged, driven largely by changes to the federal capital gains tax set to take effect on June 25, 2024. In response, many sellers rushed to close deals before the new tax was implemented. However, the tax increase was later postponed to January 2025, and on March 21, 2025, Prime Minister Mark Carney announced the cancellation of the proposed hike, keeping the capital gains inclusion rate at 50%.

A federal election has been scheduled for April 28, 2025, primarily to address growing tensions with US President Donald Trump over escalating tariffs. BC, ranked fourth-lowest among the provinces for impact, would see modest losses due to only 51% of goods being exported to the US. The projected GDP decrease was 1.2 per cent below baseline.

Total commercial real estate sale volume during H2 2024: $4.3B