Greater Vancouver New Home Sales Drop Nearly 90%

Greater Vancouver real estate sales are dropping incredibly fast these days. Data from MLA Canada, a notable pre-sale marketing firm, shows a big drop in sales in May. Developers are responding to the decline by cancelling or delaying many projects.

Greater Vancouver Pre-Sale Listings Decline Over 65%

Greater Vancouver pre-sale listings for real estate made a large decline. Only 539 new pre-sale units launched in May, down 37.98% from the month before. This represents a decline of 65.44% from last year. The number launched in May is 23% lower than MLA had anticipated a month before. Developers are responding to softening sales by cancelling or delaying projects. Presumably they’re waiting for demand to return, or the cost of holding underdeveloped property gives them incentive to build.

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 Sales of New Construction Drops Nearly 90%

Sales of new construction dropped by an even larger number. There were 119 pre-sales made in May, down 31.21% from the month before. This represents a decline of 89.10% from last year. The sales are the fewest monthly sales in at least two years, for any month – not just May. Things are really slow across Vancouver these days.

Demand For Greater Vancouver Real Estate Is Pudding Soft

Sales made a larger decline than new listings, driving relative demand lower. The sales to new listings ratio (SNLR) declined to 22% in May, down a massive 68.57% from last year. The market is a buyer’s market when the SNLR is below 40%, and prices are expected to decline. Above 60%, and the market is a seller’s market, where prices are expected to rise. Between 40% and 60% the market is balanced – meaning priced right.

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.

Inventory of new pre-sales is on the decline, falling below estimates for the month. However, the decline in inventory wasn’t as large as the decline in sales. This resulted in further deterioration of relative demand, causing developers to respond. Units launched in the month are below estimates, with a few future projects now delayed. Condo resale prices are making large declines, so it remains to be seen if this can soften the price drops.

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  • Reply
    Dinesh 5 years ago

    So how does this work exactly? They kill inventory, which creates more competition for existing buyers. This prevents prices from falling? It’s that easy to have a cartel like situation?

    • Reply
      Xhafa 5 years ago

      For pre-sales. Most pre-sale inventory in Vancouver (and Toronto) were being bulk sold to investors, that would flip them end users closer to build. Now that resale prices are falling, the incentive for investors to buy the assignments in bulk isn’t there.

      • Reply
        Cash 5 years ago

        The theory makes sense only if the region didn’t overbuild . Ive seen it argued that the GVRD has been overbuilding for +/- a decade.

  • Reply
    Mila Lévesque 5 years ago

    Speculators are like a cancer moving market to market. They’ve now moved on to Quebec.

    It won’t stop until the Canadian government stops flooding the housing markets with cheap money. Those with a little bit of extra cash can absorb and scalp back to people that actually want to occupy, as long as households can continue to borrow more and more money. All levels of government are concerned with making sure people can borrow as much as possible, as cheaply as possible.

    • Reply
      Chester Pape 5 years ago

      Canada is a hypocritical country if they preach do-gooder attitudes to the world, yet allow a scumbag money launderer or child molesting organ harvester to park their dirty, laundered money into Toronto or Vancouver real estate.

  • Reply
    Chester Pape 5 years ago

    Money launderers and dictators from undeveloped countries are parking their monies into Toronto, Ottawa and Montreal. This explains the drop.

    Canada is open for business and allows money launderers to buy Canadian real estate. Donald Trump should keep an eye on this as a few of these “foreign investors” are influential people from America’s enemies.

  • Reply
    John Smith 5 years ago

    Canada offers one of the easy ways to buy real stock properties without much hustle which is why there are so many money launderers who get easy with the property buy and sale. The exact procedure they might know well. The Australian real stock has also shown some fall in recent days but yes it is not so easy to buy property like as canada.

  • Reply
    Bob 5 years ago

    Which driving force in Vancouver real estate will win: Hong Kong $$$ fleeing their PRC overlords, or the PRC debt bubble bursting:

    Personally, I have no idea.

  • Reply
    Cathy 5 years ago

    My mortgage is $12,000 a month. Should I sell my Vancouver home?

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