Vancouver

Greater Vancouver Condo Pre-Sales Cut In Half, New Inventory Delayed

The pandemic drove Greater Vancouver new home sales off a cliff, but things have improved… a little. MLA Canada, a Vancouver-based real estate firm specializing in condo pre-sales, observed an increase in absorption for June. Despite unusual market conditions and a bump from lows, absorption is the same rate as last year. Although the current rate is likely being managed through inventory, and project delays.

Greater Vancouver Condo Pre-Sales Down 50%, But Off Pandemic Lows

Greater Vancouver condo pre-sales bounced from record lows, but still came short. There were just 36 units sold in June, up 51% from the month before. The number is a massive 50% lower than the same month last year. A bit of a surprise considering last year was one of the slowest Junes on record. This persistent slowdown is turning into a throttle for new project launches.

Greater Vancouver New Pre-Sale Real Estate Listings

The number of newly available pre-sale units of new homes across Greater Vancouver.

*MLA Canada number not available.
Source: MLA Canada, Better Dwelling.

Over 57% of Pre-Sale Homes Expected Are Delayed

The extended slowdown in sales is leading to a lot less inventory than expected. Greater Vancouver saw 259 new pre-sales hit the market in June, up 8% from the month before. This works out to a drop of 50%, compared to the same month last year. It’s inline with the decline in sales, but it’s also 57% lower than the anticipated units for the month. That’s about 338 units delayed, that may pop up later, or be cancelled  – depending on future absorption.

Units are being absorbed at an incredibly low rate, but similar to last year. The sales to new listings ratio (SNLR) reached 14% in June, the same ratio as last year. Analysts generally believe prices will rise when the SNLR is above 60%, fall below 40%, and are priced correctly between those two.

Greater Vancouver New Home Pre-Sale Absorption

The ratio of sales to new listings of pre-sale homes across Greater Vancouver.

*MLA Canada number not available, Better Dwelling estimate based on inference data obtained from MLA.
Source: MLA Canada, Better Dwelling.

Greater Vancouver condo pre-sale absorption is unchanged from last year, but with a few caveats. Sales are significantly lower this time around, and so is inventory. Even more inventory has been delayed and throttled to get to this level. The market may actually be softer than absorption implies. Whether that matters depends on if developers can effectively control inventory longer than buyers wait.

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5 Comments

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  • Reply
    Peter 2 months ago

    Funny how this demand disappeared when money laundering came under light last year, isn’t it?

    • Reply
      Ian McCain 2 months ago

      Yes, but probably not why you think. I think 99% of regular buyers want to see what happens at the end of it before deciding.

  • Reply
    SH 2 months ago

    The money launderers are underperforming. Where’s Christy Clark when you need her?

  • Reply
    Andrew 2 months ago

    There’s many reasons of pre-sale number dropped.
    Property tax and home insurance went way up. It is cheaper to rent than buy now. People are out of jobs and can’t see what the future hold. It’s not wise to make any purchase at this moment.

    • Reply
      Yvette 2 months ago

      Canada has been cheaper than to rent for over a decade now. That’s a part of the extended bubble.

      Condo landlords have only been buying because the value has been increasing enough to offset the difference between mortgage payments and rental income. Now that they aren’t, people are realizing there was no fundamental support for prices where they are.

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