Greater Vancouver is seeing new home release absorption improve, but the market is still slow. MLA Canada numbers show pre-sale absorption hit a high for 2019, this past August. The catch is absorption received a boost due to a number of project delays, due to slow sales.
Greater Vancouver New Home Inventory Falls Over 75%
Greater Vancouver is seeing fewer new listings for pre-sale inventory. There were an estimated 254 units released in August, down 75.6% from last year. The big drop is even 57.9% fewer units than analysts from MLA expected for the month. Slow absorption of new units has developers delaying many new projects.
Greater Vancouver New Pre-Sale Real Estate Listings
The number of newly available pre-sale units of new homes across Greater Vancouver.
Source: MLA Canada, Better Dwelling.
Greater Vancouver New Home Sales Were A Lot Slower
Fewer new pre-sales were sold to Greater Vancouver buyers last month. Of the new releases, only 102 pre-sales sold in August, up 75.9% from the month before. This represents a decline of 77.8% from last year. Monthly moves aren’t usually noteworthy, but sales typically fall into August – not rise. The annual decline is more important though, and that number dropped.
Greater Vancouver New Pre-Sale Absorption Rises To Balanced
Cuts to inventory firmed up absorption of new home pre-sales. The sales to new listings ratio (SNLR) reached 40% in August, compared to 44% during the same month last year. When the SNLR is above 60%, the market is said to be a seller’s market, when prices are expected to rise. The market is considered a buyer’s market when the ratio falls below 40%, and prices are expected to fall. Between 40% and 60%, the market is said to be balanced, and priced right for demand.
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’s pre-sale market saw demand improvements, but that’s half the story. The ratio largely improved due to project delays, helping to manage new releases. It works temporarily, but that places a lot of hope on a future demand surge to absorb all of the units delayed.
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and developers have the audacity to complain buyers need help, when they’re managing inventory to prevent prices from falling.
Agreed! I understand it from their side – they don’t want to lose money. However, it simply throws just about all other arguments they have out the window, regarding affordability.
Doesn’t this just set them up for a massive inventory release all at the same time? Who wants to be the developer that’s stuck in that market? lol.
Is a presale contract an actual sale?? Apparently NOT this year. These presale agreements and flipping them before completion has all comes from Hong Kong.. Hong Kong flippers have been doing this for years..and look at their housing prices.
A few years ago the news media kept on showing huge line ups of buyers in a presale release…The media FAILED to make mention that NONE of these buyers had any intention of living or owning these homes…but were there for ONE purpose…to flip…Hong Kong flipper have been doing it for years..