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💪 Surrey's industrial boom, City Centre changes, & BoC's interest rate dilemma

💪 Surrey's industrial boom, City Centre changes, & BoC's interest rate dilemma

Learn about local changes in the Fraser Valley area that impact the value of your home and lifestyle.

Scott Moe
September 21, 2023

Happy Thursday!

Fraser Valley continues to stay in a strong economic position as Canada grapples with decisions about interest rates and inflation.

Keep reading to see how Surrey is becoming an industrial hub, where we might see more housing developments, and what is going on with Bank of Canada and their interest rates.

— Scott

💪 Surrey leads Metro Vancouver region in new industrial land projects

Driving the news: Surrey emerges as a top contender for businesses seeking industrial space in Metro Vancouver amidst regional shortages.

Details: The pressing shortage of industrial real estate has put Surrey in the spotlight. With new developments, especially in the Campbell Heights area, the city offers a solution to the region's tight industrial market constraints.

Surrey’s share in the region's industrial inventory rose from 15% in Q1 2014 to 18% by Q2 2023.

Of the region's top five industrial markets under construction, Surrey accounts for a whopping 17% or 1.4 million sq. ft. of the 7.3 million sq. ft. being built.

Why it matters: As Vancouver’s industrial space becomes scarcer, businesses are looking for alternatives. Surrey's surge in offerings comes at an opportune moment, bridging the gap between demand and supply.

The big picture: Richmond boasts the most inventory at over 45.4 million sq. ft., with Surrey trailing at 37.65 million sq. ft. However, Surrey had the highest regional industrial vacancy rate at 2% in Q2 2023, while Richmond recorded a mere 0.5%.

Between the lines: While Richmond is an ideal spot for port-related businesses, Surrey’s value proposition includes its labour and housing advantages.

As Garth White from Avison Young points out, businesses now prioritize labour demographics and Surrey fits the bill.

What’s next: The Campbell Heights industrial and business park area, accounting for 32% of Surrey's inventory, has been pivotal.

Currently, there’s anticipation around the South Campbell Heights addition, which could add another 245 hectares.

The proposal faced challenges from the Semiahmoo First Nation and environmental groups, though Metro Vancouver approved it.

The bottom line: Surrey's proactive stance in addressing industrial real estate demands, especially through key developments like Campbell Heights, positions it as a desirable market for businesses.

With potential plans for South Campbell Heights, Surrey might play an even bigger role in the Metro Vancouver industrial scene over the next decade.

🏗️ Condo towers to replace temporary modular homes in Surrey City Centre

Driving the news: A developer has submitted a proposal to redevelop a property immediately adjacent to SkyTrain Gateway Station in Surrey City Centre into a mixed-use development with two high-rise towers.

The property currently holds 60 temporary modular home structures used for transitional housing.

Details: The proposed development would include two towers, with the west tower reaching about 509 ft with 50 storeys and the east tower reaching 459 ft with 46 storeys, including base podiums up to nine storeys.

A small retail/restaurant component of about 1,300 sq ft is incorporated into the plans for the ground level of the west tower facing 107A Avenue.

The total building floor area is about 843,000 sq ft. This is about 8.2 times larger than the size of the lot.

An underground parking garage would provide 969 parking stalls. This is a 20% reduction to the City’s parking requirements for a development of this size.

Why it matters: The project would add a significant amount of housing and retail space to Surrey City Centre, and it would also be the first mixed-use development to be built adjacent to SkyTrain Gateway Station.

The big picture: The City of Surrey is working to revitalize Surrey City Centre, so this development falls in line with their goals. It is also consistent with the provincial government's goal of increasing density around transit stations.

Between the lines: The proposal has been met with mixed reactions from residents and stakeholders. Some people are supportive of the development, as it would add much-needed housing and retail space to Surrey City Centre.

Others are concerned about the height of the towers and the impact they would have on the surrounding area.

The bottom line: The proposed development is a significant one for Surrey City Centre, and it will be closely watched by residents and stakeholders alike.

🎥 Are BC Home Prices Really Falling?! (Surrey, Langley, South Surrey & White Rock Housing Markets)

Are home prices dropping in our local market? I dive into the truth about interest rates, real estate trends, and more in this video.

💰 Bank of Canada and Interest Rates:
What's Going On?

Driving the news: The Bank of Canada has been in meetings starting on Aug. 31 to discuss maintaining or increasing their primary overnight interest rate.

They chose to keep it at 5% after considering what more hikes could mean for the economy and the cost of living.

Details: BoC’s governing council noticed that the past rate increases have started to cool things down in the economy, but inflation is still an issue.

BoC's decision is in line with the actions of other major central banks, which are also raising interest rates to combat inflation. Inflation rose to 4% this week as many goods like groceries and gas have increased in price year over year.

The Bank is warning that it is prepared to raise interest rates further if needed despite the pause.

Why it matters: The Bank of Canada's decision to hold interest rates at 5% is a signal that it is committed to bringing inflation back to its 2% target.

The big picture: BoC has raised interest rates by 300 basis points since March 2022. This is the fastest pace of rate hikes in decades.

Between the lines: The Bank of Canada is facing a difficult task. It needs to bring down inflation without causing a recession.

What's next: The Bank of Canada will continue to monitor economic data and make decisions about interest rates based on its assessment of the outlook for inflation.

The bottom line: BoC has difficult decisions to make to help improve our economy and pull inflation back down to more normal rates.