British Columbia’s multi-family real estate market will face many challenges this year as it grapples with geopolitical uncertainty, ongoing high borrowing costs, large supply and a in market dynamics caused by an increase in sales listings, says a leading apartment-sales specialist.

“We have several headwinds,” said Mark Goodman, founder and principal of Goodman Commercial. “The challenge right now is that the investors are requiring, and are more sensitive to, higher yields.”

The top concern is that the cost of borrowing is not dropping as the Bank of Canada maintains its benchmark interest rate at 2.25%. The large supply for sale ranks No. 2 on investors’ list of concerns.

Also, the market has shifted in favour of buyers.

“It’s no longer a seller’s market,” said Goodman.

The market is also being being challenged by softer rents and an ongoing “shaky” economic outlook.

“The tariff and trade wars continue to flare up around the world, and I think it’s impacting investor confidence,” he said.

Inflation is also a concern, although it has been “tamed,” and vacancy has reached a three-decade high.

“Landlords are having to compete for tenants for the first time in a generation,” said Goodman.

Investors are also wary of the uncertainty surrounding the Cowichan court decision, which recognized that the Cowichan Tribes have fee-simple title rights covering areas of southern B.C., including many parts of Richmond.

“Those reverberations continue to be felt across the province,” said Goodman. “With that, coupled with increased inventory, we’re going to continue to see court-ordered and receivership sales.

“I don’t think there’s any end in sight for the foreseeable future.”

Local, provincial and federal “policy overload” has also hampered development, he added.

“Developers trying to build property and landowners are continually struggling to keep up with these constantly shifting goalposts,” said Goodman.

The market will not be anywhere near as explosive and hot as it was a few years ago, but activity will remain steady while continuing to tread water amid falling prices and greater data availability, he predicted.

Pictured: Vancouver

Photo: City of Vancouver