Photo: Paul Joseph/Flickr
Vancouver condo listings are rising amid weakened demand, a perfect recipe for lower selling prices and a trend experts suggest won’t reverse in the near future.
“I think we’re really at the early stages,” says Steve Saretsky, the Vancouver realtor who created the VancityCondoGuide, of the condo market’s cooling.
“Condos really topped out in the winter of 2017, so you could argue that the correction in that space is really just beginning,” he tells Livabl, noting it can take years for a market to really reach bottom.
Further aggravating the situation is an anticipated number of condo completions that are expected early next year.
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Typically, these units would have been purchased before shovels even broke ground in what’s known as a pre-construction sale, technically an agreement to buy at a later date.
When the units are finished, the owners — who are typically investors rather than end users — will look to sell off their units or rent them out, suggests Saretsky.
“That is going to bring lots more supply,” he says. “I think it’s a huge thing that hasn’t really played out a whole lot yet,” he adds in an interview.
In a report released last month, Central 1 Credit Union flagged the potential risks the pending completions present for the overall real estate market.
So far, home listings have already surged compared to the same time last year, according to the REBGV’s latest monthly data, published this week.
In all, there were 13,084 resale properties available in Metro Vancouver in September, up 38 per cent from last year and 10.7 per cent over August.
Here comes your inventory. Greater Vancouver condo inventory jumped 75% Y/Y in September. pic.twitter.com/JsGgDN9ZqA
— Steve Saretsky (@SteveSaretsky) October 2, 2018
The number of condos on the market in Greater Vancouver at the end of September was 75 per cent higher than what was counted at the same time in 2017.
At the same time, condo sales have plunged. Apartment transactions totalled 812 last month, representing a 44-per-cent decrease from 12 months prior, says REBGV’s report.
“Weaker sales [and] rising inventory generally leads to lower prices, and that’s sort of what we’re starting to see in the condo space,” says Saretsky.
Over the last three months, Vancouver condo prices are down 3.1 per cent, according to REBGV, which pegged the benchmark price at $687,300 in September.
Saretsky is not alone in anticipating Vancouver’s housing market won’t recover any time soon. In a note published this morning, BMO Senior Economist Robert Kavcic also highlighted elevated listings and declining prices in not just the condo market but the detached segment as well.
“We would not be holding our breath for a quick price rebound in this market,” writes Kavcic in the note titled “Vancouver Housing Still Reeling.”