New condo sales have declined sharply in Vancouver, the latest data from real estate consultancy Altus Group shows, but activity isn’t likely to collapse below historical norms.
That’s because homebuilders have been bringing more affordable units to market, keeping homeownership within reach and sparking purchases. And if builders continue to do so, the Vancouver area’s new-home segment will likely be sheltered from a more severe decline, the real estate consultancy suggest.
“Looking ahead to 2019, we expect new condominium apartment sales for the year as a whole to be down somewhat again, as the market continues to adjust from the very strong showing in 2016,” reads the latest Altus Group Condominium Apartment Monitor.
Housing Market News Alerts
Sign up now for news alerts on the Vancouver housing market
“However, assuming we continue to see the trend to more affordable options being brought to market, sales should remain above the 10 year average,” the report continues.
In the third quarter of 2018, the average price per square foot for a newly launched Vancouver area condo was $839, down 10 percent from the same period a year earlier.
An increase in condo projects launched in lower-priced neighbourhoods was a major contributor to the decline, Altus Group suggests. Meantime, units were getting smaller, which further improved affordability.
Among newly opened projects in Q3 of 2018, units averaged 601 square feet, 13 percent smaller than what was released in the previous year.
By the end of the third quarter, close to 42,000 new condo units were either in the pre-construction phase or already under construction across the Vancouver area. But for the time being, supply remains tight.
The inventory of units on the market totalled 3,660. While that’s up 9 percent, it amounts to just four months of supply, meaning this product would sell out in that time frame if the current pace of sales was maintained and no new units were added. Over the past decade, supply has averaged 10 months.
“The inventory available to purchase remains low in historical terms,” Altus Group notes in the report.