The beginning of Fall 2024 is round the corner and interest rates are on their way down. Bank of Canada cut overnight lending to 4.75% on June 5th and 4.50% on July 24th from a high of 5% prior to June this year. Most economists expect more cuts later this year on September 4th, October 23rd and December 11th.

Overall, there is much to celebrate as interest rates are expected to drop to 2.75% (TD Economics) – 3.25% (Bloomberg Economics) by the end of 2025. Several banks have already started offering preferential lending rates to some of their best clients. Also, developers are offering low-interest rate loans to buyers of residential and commercial presales.

The market fundamentals

The market fundamentals are still strong, and we expect a strong surge in demand for all resale and presale commercial and residential real estate across the Lower Mainland. Over the last year, industrial sale prices and rental rates have declined along with prices for industrial land.

We are seeing some of the best deals in the purchase of industrial warehouses as well as lands in Metro Vancouver and Fraser Valley. Of note are ready-to-build industrial land parcels in Campbell Heights industrial area going for $6 million - $7 million an acre.

Also, opportunities exist for tenants looking to lease large-format warehouse spaces with dock loads, with base lease rates in the $18 - $20 psf range. Retail tenants and buyers should note that there is limited supply of retail spaces to lease or purchase across the Lower Mainland.

Both retail buyers and tenants will be well served by purchasing retail presale properties. We expect strong growth in retail rents and prices in the foreseeable future. Contact us for detailed market insights or assistance with leasing or purchasing commercial properties in the Lower Mainland.

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