![\"In](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2022\/06\/vancouver-q1-2022.jpg\")
<\/a>Photo:\u00a0Imagenet<\/a>\u00a0\/ Adobe Stock<\/em><\/p>\nAmped up activity from new construction buyers in Metro Vancouver reduced slightly during the first quarter of 2022, a trend that stemmed from higher borrowing costs, war and rising inflation.<\/p>\n
In its Vancouver Multi-Family Take report for Q1-2022, Zonda Urban reported that early 2022 kicked off similar to the \u201ctorrid sales pace,\u201d that was seen during the previous business quarter. For the first two months of the year, purchaser activity appeared to be on pace with 2021 levels even as COVID-19 cases increased and supply chain issues persisted.<\/p>\n
\u201cHowever, the combination of Russia following through with their devastating and unconscionable invasion of Ukraine, spiking inflation and the first Bank of Canada prime rate hike in more than three years reduced the froth in Metro Vancouver\u2019s new condominium and townhome market to a simmer,\u201d said the report.<\/p>\n\n
Although sales volume softened by the end of Q1-2022, the number of transactions logged was still the fourth-highest quarterly total recorded since 2016. While investors and end-user buyers stayed active during the quarter, there was a \u201cnotable shift in buyer sentiment,\u201d as urgency levels dropped toward the end of the quarter. Higher domestic inflation coupled with rising interest rates prompted some prospective buyers to reconsider their purchase plans.<\/p>\n
\u201cTo date, the lower urgency levels and softening in demand have had little to no impact on pricing, other than for some developers to offer higher-valued incentives to attract purchasers,\u201d explained Zonda\u2019s report. \u201cGiven the current climate of rising construction and carrying costs, it is likely not possible for some developers to reduce prices without impacting the financial viability of a given project.\u201d<\/p>\n
Multi-family sales fell on quarterly and yearly basis<\/h2>\n
Between Q4-2021 and Q1-2022, new multi-family homes sales fell 17 per cent. Eight of Metro Vancouver\u2019s 13 sub-markets recorded lower sales during Q1-2022. Compared to the same quarter a year ago, sales were down five per cent in Q1-2022.<\/p>\n
The 6,323 sales that were recorded last quarter marks the second-highest quarterly sales total recorded in the past decade after Q1-2021. It also surpasses the 10-year average of first quarter sales by 55 per cent.<\/p>\n
Sales for all Vancouver product types decreased between two to 45 per cent when compared to Q4-2021. New townhomes recorded the steepest drop in sales, which declined from 1,189 to 656 transactions from quarter-to-quarter. On a yearly basis, wood frame condo and townhome product dropped two and 68 per cent, while concrete condo sales rose 35 per cent yearly as \u201cinvestor demand for this product type remained strong.\u201d<\/p>\n
Despite falling sales, over 70% of new product was absorbed<\/h2>\n
At the end of the first quarter, there were 44 new project launches and a 19 per cent yearly increase in
\nnewly-released units.<\/p>\n
There were 1,192 more sales than unsold units available to purchase in Metro Vancouver at the end of Q1-2022. The spread between quarterly sales and unsold inventory at the end of the quarter narrowed 34 per cent from Q4-2021 according to Zonda Urban.<\/p>\n
\u201cDespite the drop in sales it is evident that demand remained strong during the quarter as 71 per cent of new product released was absorbed,\u201d noted the report.<\/p>\n