Vancouver

Greater Vancouver New Home Sales Jump, As Market Braces For Flood of Inventory

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 Listings

The 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 Absorption

The 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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10 Comments

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  • Reply
    Han 6 months ago

    Yay. It’s 2017 again. LOL.

    Oh well, at least it’s surprising no one this time around, and everyone is just used to it.

    • Reply
      Credit Guy 6 months ago

      Lovin it. Let’s see how high it can go, because I think we can fail all of Canada’s major cities this time.

  • Reply
    Ethan Wu 6 months ago

    Did Vancouver figure out vacant home taxes and foreign buying, or is it like Ontario where there are gaping loopholes to allow it?

    • Reply
      Grut 6 months ago

      The beneficial ownership registry is now online. It’s $5/pop to search though, so it’s impossible to browse and see if they’re actually enforcing anything.

  • Reply
    Kyle Stewart 6 months ago

    Thanks for this report. Is there any way you can include home prices like you do with tattoo to? Thanks and a big fan.

  • Reply
    David Tran 6 months ago

    Construction financing guys have been saying projects are being pushed back to see if material costs stabilize. I wonder how many projects are actually in the pipeline though.

    • Reply
      Omar 6 months ago

      Yes. Industry report for developers said the same thing. Just the savings on lumber from delaying are tens of thousands developers would have had to bill buyers for.

  • Reply
    PW 6 months ago

    Good. More inventory is always welcome. I wonder how much money the government gave them to build it. Canadians now get to pay twice for a home. Once when they buy it, and another when they help pay off the tax subsidies given to the developer.

  • Reply
    Nassim 6 months ago

    What happens when Vancouver reopens, and everything closed down and everyone’s friends moved?

    • Reply
      giraffe 6 months ago

      same as usual…prices will go only up…for the last 20years the TREND of pricing is ONLY up…

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