Zonda Urban’s Vancouver Multi-Family Take for Q3-2023 shows a market cooldown for new homes. However, stable housing prices, constant migration, and higher borrowing costs have led to a significant regional affordability issue.
Zonda Urban’s exclusive data, released late last week, calculated 2,682 new homes sold during Q3. That marks a 25 per cent decrease, but that number is up nearly 75 per cent compared to the average sales total from the third and fourth quarters of 2022. Sales were 19 per cent lower in the North of Fraser region and 33 per cent lower in the South of Fraser region compared to the previous quarter.
Proximity to mass transit popular in Q3-2023
In the third quarter of 2023, buyers were particularly interested in condominium complexes at price points close to current or future Skytrain stations or in unique developments such as Citizen.
The third quarter witnessed increased sales activity at the high-rise developments by Intracorp in Burquitlam, Polygon in Perla (Metrotown), and Anthem in Citizen (Metrotown).
Notable sales totals were also experienced in the Fraser Valley in the low-rise sector of the market: Unity by Whitetail Homes (Langley), Timer South Village Condos by Vesta Properties (Langley), Village at Sunshine Hills (N. Delta) by JPS Development and Fleetwood Village II Condos (Surrey) by Dawson + Sawyer.
Price and buyer trends
The average gross price for a concrete unit in Metro Vancouver over the past year is $930,944. A wood frame unit costs $657,301, and a townhome costs $1,111,238. Absorption rates are 62, 64, and 63 per cent, respectively.
North of the Fraser, concrete units are averaging $1,021,547. Wood frame units are $729,721, and townhomes are $1,306,034. Absorption rates are 64, 59, and 56 per cent respectively.
South of the Fraser, concrete units are averaging $782,789. Wood frame units are $592,856, and townhomes are $894,091. Absorption rates are 73, 68, and 76 per cent, respectively.
Overall average prices for new homes in North of the Fraser locations compared to South of the Fraser are 23 per cent higher for concrete condominiums, 19 percent for wood frame condominiums, and 32 higher for townhomes.
Following two rate hikes by the Bank of Canada that brought the rate to five per cent at the time of the Zonda Urban report, there has been a recent slowdown in third-quarter sales. Since buyers usually need to wait to complete and assume a mortgage, interest rates may not directly influence the condominium pre-sale market in the near future.
However, higher borrowing costs have caused a slowdown in sales activity in the resale market. The Metro Vancouver new home market is still seeing solid sales activity despite the low levels of confidence, especially for price-point-oriented condominium complexes in strategically located areas.
