As inflation trends downward and interest rates continue to decrease over the second half of the year, multifamily investment activity is expected to increase in Vancouver and Victoria, according to CBRE’s new 2024 Mid-Year Apartment Report.

“Mid-year sales activity and pricing reflects both the demand for and confidence in the B.C. multifamily asset class from both local private investors and national institutional investors,” says CBRE Vancouver Vice President Greg Ambrose. “With further rate cuts expected over the coming quarters, confidence is returning to the investment market which is starting to show signs of recovery.”

While sales volume has been trending down since the peak in 2021, the first half of 2024 saw 61 transactions totaling 2,386 units and $830 million, suggesting it is back on track to exceed last year’s sales and possibly be similar to 2022’s numbers.

According to the report, multifamily cap rates throughout B.C. edged slightly higher in the second quarter of 2024. The expansion of cap rates was influenced by motivated seller deals driven by the capital gains inclusion rate increase, which in most instances yielded lower accepted pricing (higher cap rates) to take advantage of higher net proceeds prior to the June 25 cut-off.

Monthly asking rents

Nationally, apartment rents reached record highs in the first half of 2024, with average asking rents for all residential property types in Canada hitting $2,202 in May, surpassing $2,200 level for the first time. All provinces recorded annual increases in apartment rents for purpose-built and condo rentals, but British Columbia boasts the highest average asking rent of all the provinces at $2,526 in May 2024.

In Vancouver, total average asking rents are the highest in the country at $3,008 with bachelors at $2,317, 1-bedrooms at $2,684 and 2-bedrooms at $3,729.

For more multifamily investment research and analysis, visit: Commercial Real Estate Services | CBRE Canada