The cityscape is pictured in downtown Vancouver, B.C. Thursday, Dec. 22, 2016.JONATHAN HAYWARD/The Canadian Press
A shortage of land and a growing economy fuelled a 47-per-cent surge in the value of commercial real estate sales across British Columbia's Lower Mainland in 2016, says the head of the region's real estate board.
Figures released Monday by the Real Estate Board of Greater Vancouver show sales involving commercial real estate reached nearly $13-billion last year compared with $8.8-billion in 2015.
The report also measured a 21 per cent spike in the number of sales involving commercial real estate over the same one-year period.
"It's really the confidence in the B.C. and Vancouver economy," board president Dan Morrison said.
"It's no surprise that we see the same thing happen with commercial properties as has been happening for residential properties."
Residential real estate prices have skyrocketed across the Vancouver area in recent years, prompting the B.C. government to introduce a 15 per cent tax on foreign buyers last summer on homes purchased by anyone who isn't a citizen or a permanent resident of Canada.
Last week, the government announced it was tweaking the law retroactively so that foreigners who come to B.C. through the provincial nominee program won't have to pay the tax, which also doesn't apply to commercial property.
Asked if the foreign buyers tax has affected commercial real estate sales, Morrison said it is possible speculators have redirected their investments from residential to commercial properties, but there is no data to back that up.
"I would attribute it more to the economy than anything else," Morrison said.
Land sales led last year's growth in commercial real estate, the report says.
The value of commercial land sales explode to $7.2-billion, an 80 per cent increase over $3.9-billion in 2015, the report says.
"That's the thing that's the most scarce, especially if you're looking for new commercial ventures down the road, you want to make sure you've tied up the land because that's often the most important component," Morrison said.
The report says office and retail sales also hit record numbers, reaching $3.6-billion in 2016, 47 per cent more than $2.5-billion in 2015.
A new real estate report from Royal LePage analyzing trends in the last quarter of 2016 suggests that the GTA will become the hottest housing market in the country in 2017, surpassing Vancouver.