Greater Vancouver new home sales are on the rise, as the market gobbles up new inventory. MLA Canada data shows April was a busy month for new home inventory, with buyers absorbing more than half of units launched. Pandemic delays led to a significant backlog of inventory though, that will be coming to market soon. This flood of inventory may be a little more difficult to absorb.
Greater Vancouver New Home Inventory Is Rising
New home inventory in Greater Vancouver was a little higher than usual. There were 977 new units released in April, down 32% from a month before. This works out to 245% more inventory than last year. The monthly decline is seasonal for this period, and the annual rise was skewed by base effect. This makes it a little more difficult to gauge inventory change, but it was 13% higher than April 2019. The number of projects launched last month was higher than normal.
Greater Vancouver New Pre-Sale Real Estate ListingsThe number of newly available pre-sale units of new homes across Greater Vancouver. Source: MLA Canada; Better Dwelling.
New Projects Launched Are Selling A Significant Volume
Sales of last month’s new project launches were fairly brisk, even beyond the base effect. There were 547 sales of the new homes launched in April, down 35% from a month before. This is an increase of 1,037% from last year. The monthly drop was seasonally expected. Once again, the base effect kind of washes away any meaning of the annual growth number. However, last month’s sales were 216% stronger than April 2019, and 45% higher than April 2018. It may have slowed down from a month before, but it was unusually strong for the period.
A Lot More Inventory Is Coming To Market
Strong inventory growth and sales led to a balanced sales to new listings ratio (SNLR). The SNLR reached 56% in April, a slight downtick from a month before. However, it was the highest rate for absorption since July 2018, prior to March’s numbers. This is technically balanced for the market, and means it’s priced right for the current level of demand.
Greater Vancouver New Home Pre-Sale AbsorptionThe ratio of sales to new listings of pre-sale homes across Greater Vancouver. *MLA Canada number not available.
Source: MLA Canada; Better Dwelling.
One important standout data point had nothing to do with last month, but what’s happening this month. MLA has forecast this month will see 2,708 units launched, up 334% from a month before. It would also be 1,404 more than last year in April. In any context, this would be the most units launched since at least 2017. This should help to boost sales, but it would be tricky to find enough demand to absorb this many units. At least without weakening price growth.
After a mostly boring year for Greater Vancouver new home sales, it’s starting to pick up very fast. Sales are rising to levels not seen in the past few years, but so is new inventory. The SNLR is currently balanced, but delays throughout the pandemic caused a backlog. As this backlog starts to clear, it will become more difficult to maintain this level of absorption. Still, it’ll be interesting to see buyers try.
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