High borrowing costs are prompting a sharp decline in Vancouver industrial land sales, says a new report.

Industrial land sales declined 59% year-over-year in the second quarter, said the Real Estate Board of Greater Vancouver. A total of 66 industrial properties sold in the second quarter of 2023 compared to 161 a year earlier.

“Real estate transactions across the Lower Mainland have been affected by some of the highest borrowing costs we’ve seen in over 10 years,” said Andrew Lis, REBGV’s director of economics and data analytics, in the report. “With the landscape for monetary policy looking set where it is for at least the near-term, it’s likely we’ll see the commercial real estate market continue along this trajectory for the rest of 2023.”

Sales fell in all commercial real estate investment categories covered. Commercial land sales dropped 62.6% while office and retail asset purchases declined 51.3%. Multi-family land sales took the softest hit, dipping 38.7%.