Published at 08:39 on 30 April 2022
I basically predicted something like this would happen back in April, 2020, although as part of a post that exaggerated the total amount of coming economic disruption. I bet the same trend is happening in Canada, too, which is yet another reason (as if one is needed) to play it slow on any decision to purchase real estate anyplace in greater Vancouver.
One wrinkle I hadn’t completely foreseen (but probably should have) is the disconnect between commercial and residential real estate costs. It will be interesting to see how that one plays out. Hopefully, it will prove not too difficult to repurpose office buildings into residential ones, though the possibility of both regulations and architectural constraints largely preventing that cannot be discounted.
In the latter department, ultimately it wouldn’t stop the conversion any more than de-industrialization and just-in-time manufacturing stopped the conversion of vacant warehouse spaces to lofts, and the end result would, like lofts, be quirky spaces that initially appealed to artists and other creatives. Ultimately, however, can take a long time, so there may well be a prolonged period of high office vacancy rates coming.