Vancouver

Vancouver Condo Absorption 18% Lower Than Last Year

The Vancouver real estate market got more mixed signals, as condos staged a minor recovery. Far from last year, but still solid.

Vancouver Condo Absorption 18% Lower Than Last Year

Single family homes in Vancouver continued to feel some down pressure, but the condo market appears to be stabilizing. The latest numbers from the Real Estate Board of Greater Vancouver (REBGV) show that prices moved higher, sales dropped, and available inventory is being consumed at a strong pace for the industry.

Prices Increased

Prices for condos in Vancouver are still on the way up, despite the rest of the market lagging. The benchmark average for a condo in October was $512,300 – a 0.3% increase from the month before, and a 20.5% increase from the same month last year. Not the booming market of yesteryear, but performing better than the average Vancouver home. Single family detached units are actually declining.

Not all areas in the Vancouver region are treated equally however. Statistics from the REBGV are for the whole Vancouver region – including the suburbs. Maple Ridge logged the least expensive condos, with an average benchmark price of $205,500. West Vancouver was not surprisingly the most expensive, with an average benchmark condo price of $899,800.

Vancouver Condo Benchmark Prices

Vancouver Average Condo Benchmark Price

Sales Falling

Sales dropped, which is somewhat expected when prices reach higher levels. October logged 1,178 condo sales, which is a decrease of 23.7%. The largest decline was in Vancouver West, where it dropped by 31.5%. Conversely, Maple Ridge had a massive increase of more than 60%. Declining sales by itself isn’t much of a problem, but listings only fell 8%. This means inventory is building faster than it had last year.

Absorption Rates

Speaking of sales vs listings, absorption rates increased from last month. The current rate of absorption for Vancouver condos is 68%, a change of 14% from last month. This number is very high for industry standards, but 18% lower than last year. Generally speaking, absorption rates above 20% mean prices will continue to rise, below 10% means prices will come down. Between that is a balanced market. In a market that’s as high flying as Vancouver, momentum and individual buyer/seller circumstances propel movements faster though.

Vancouver Condo Absorption

Vancouver Condo Absorption - October 2016

The market may not have been as hot as last year, but demand and prices for condos hasn’t dropped as quickly as single family homes. Vancouver real estate may be wobbly, but it isn’t quite crashing.


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3 Comments

  • Reply
    Dave Calhoud 9 months ago

    Condos are basically the only chance of home ownership for most people in Vancouver. No one here has $7 million to buy a teardown bungalow – you just can’t afford those here.

  • Reply
    Ross 9 months ago

    Hmm, has anyone considered that the new mortgage stress test rules only came into effect in late October and that any negative impact will take at least a few months to show up (and given the REBGV’s made up HPI tracking more like a year).

    Let’s see how things are looking in 6-12 months for condos and houses before we assume things aren’t crashing. After all, it took almost 6 years the US crash to bottom. We are only a few months in here.

  • Reply
    Don 9 months ago

    Drive around Vancouver and check out the near completions along Cambie, Kingsway, Hastings, Marine Drive/Boundary… Take a ride down to Richmond and see the near completions along No. 3 Road, Olympic Oval…. Ride along Lougheed near Brentwood Mall, Metrotown, … in Burnaby. Check out the low rise developments all over the place in Coquitlam, Maple Ridge, massive numbers in Surrey, numerous in Langley, and further out.
    While the mainland Chinese may have bought in Yaletown and Coal Harbour, it is the local Chinese that salivate and buy multiple units all over the place in Metro Vancouver.
    Rentals are tight because many of the houses were taken off the market to build and there are far more empty homes than people may think. Wait until all these inventory come into the market in 2017. We shall see how all these local Chinese desperately fight for reliable tenants to sustain their mortgage payments. This heightened uncertainty should give a few elderly local Chinese buyers heart attacks as they leverage up further to invest in their 3rd, 4th, … 10th condo units. The Indo-builders love to build these suckers more units or hold on to their building lots on hand to control the prices so these suckers can bid the prices higher and higher.

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