As resale prices and sales activity march lower overall in Vancouver, the number of new condos sold climbed last quarter, according to a new report from Urban Analytics.
The real estate-research firm, which gathers data directly from builders, developers and their marketing agencies, counted 3,447 sales of new condos and new townhomes throughout Metro Vancouver in the third quarter of this year.
The tally is up from the 3,254 transactions observed in the previous quarter and largely the result of specific regional demand.
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“The primary reason for the quarterly increase in sales was strong demand in the suburban sub‐markets south of the Fraser River, where investor and entry-level demand for low rise condominium product remained strong,” reads the report, authored by Michael Ferreira, managing principal of Urban Analytics.
Despite the recent sales rally, activity is still down from year-ago levels. In the third quarter, townhome transactions declined 30 percent on a year-over-year basis, while concrete-condo sales fell 21 percent annually. Year-to-date sales of all new multi-family dwellings in Metro Vancouver declined by 14 percent compared to the same nine-month period in 2017.
Selling pre-construction condos has also gotten more difficult lately, Urban Analytics suggests. “Media reports about slowing market conditions, particularly in the resale sector, are also causing some buyers to delay their purchase decisions as they wait to see if prices in the new home sector will drop,” says Ferreira.
Supply has been piling up as a result, the firm notes, and there were 4,478 unsold units in Metro Vancouver last quarter, a quarterly increase of 44 percent. This has led to increased competition between builders, and Urban Analytics sees this trend persisting. “The increased amount of competitive supply being released to the market over the coming months combined with the softer demand will likely put additional moderate downward pressure on achievable sales values,” writes Ferreira.
So far, prices are off 5 to 15 percent from the market’s peak roughly around the beginning of the year, depending on the housing type and location, Urban Analytics estimates. For example, the report estimates new concrete condos on the CAmbie Corridor command average sale prices of $1,500 per square foot, while developers of new townhomes in North Vancouver are having trouble selling inventory at an average of $900 per square foot.
“Buyer urgency levels have dropped considerably among most buyer groups given the increasing amount of competitive supply in the marketplace [and] the number of actively marketing projects competing with one another in a given area,” notes Ferreira.