Vancouver

Greater Vancouver New Home Inventory Jumps 40%, But Only 31 Units Sell

Greater Vancouver new home sales are still unusually soft. MLA Canada data shows pre-sales for new homes fell in July. The decline slowed new inventory launches, with over half of expected units delayed. Even with the delays, there was a significant increase in new inventory.

Only 31 Pre-Sale Homes Were Sold In July

The number of homes sold from new inventory was unusually slow last month. There were just 31 sales in July, down 14.7% from a month before. Compared to the same month last year, this represents a 46.7% decline. Prior to May of last year, fewer than 100 sales seemed absurd. July is typically a slow month, but it’s even slower this year.

Greater Vancouver Pre-Sale Inventory Rises Over 40%

The drop in same month sales has some developers pausing or delaying inventory. Only 221 units launched in July, down 14.7% from a month before. Last year was even slower though, so this number is actually a 40.8% increase. Despite the increase, it’s a 66.5% decline from the number of units anticipated for launch last month.

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.

The Ratio of Sales To Inventory Is Worse Than Last Year

The drop in sales and increase in inventory brought the sales to new listings ratio (SNLR) lower. The SNLR fell to 14% in July, down from 37% for the same month last year. Generally speaking, analysts expect prices to fall when the ratio is below 40%. Prices are expected to rise when the ratio is above 60%, and the market is priced correctly for demand between 40% and 60%.

Greater Vancouver New Home Pre-Sale Absorption

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

Source: MLA Canada, Better Dwelling.

Greater Vancouver’s pre-sale market is seeing more inventory, and fewer sales. The new inventory is also even lower than expected, meaning the low ratio is even worse. The soft demand is partially due to the pandemic and lockdown, however the trend does go back to last year – so not entirely.

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8 Comments

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  • Reply
    Erik 1 month ago

    What happened to the big hong kong rush to reallocate money? Oh, right. It’s just how agents have been scaring locals.

    • Reply
      Ian 1 month ago

      There is no Hong Kong rush. The value of the real estate will likely be backstopped by China. The Chinese elite have way too much money sunk into that market.

      https://www.nytimes.com/2020/08/12/business/china-hong-kong-elite.html

      • Reply
        RainCityRyan 1 month ago

        Excellent article, thanks for the link.
        If I’m reading this correctly what it’s saying is the CCP elite have a personal (family) interest in keeping housing prices and society writ large in Hong Kong stable.
        And therefore no “Hong Kong rush”.

        Not saying somehow the CCP will backstop the Canadian housing market.

  • Reply
    Yan 1 month ago

    Investors are already trying to deal with their empty units without back to school and non-payment of rent. This market’s probably dead until next year.

  • Reply
    Tom Wolfe 1 month ago

    how come the Realtor.ca website headline number is so static….
    ‘Search 269,199 listings from trusted REALTORS’ its been saying the same thing for months….up or down less than 100 a day…i think it bogus.

    • Reply
      Canuck Lover 1 month ago

      Try putting an offer on a detached home. I constantly got outbid on everything upto $1,350,000 in Vancouver.

      • Reply
        RainCityRyan 1 month ago

        I’m astounded you found SFD listed for less than 1,350,000 in Vancouver proper.

  • Reply
    east van home owner 1 month ago

    please do comparison of how strata is doing vs detatched in Vancouver during 2020

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