Vancouver new condo pre-sales crater
July 22, 2019
Pre-sales of new condos in Metro Vancouver plunged 89 per cent in May compared to May 2018 as only 115 sales were recorded, according to project market and industry analyst MLA. These are the lowest monthly sales in the last two years for any month—not just May.
In June, 10 new low-rise (wood frame) condo projects and townhouse projects were launched with a total of 519 homes, but pre-sales during the month reached just 14 per cent.
For the entire first half of this year 4,103 new multi-family homes were released and pre-sales were 36 per cent.
“Developers are continuing to monitor market absorption as they postpone their launch timelines to the latter half of 2019 or early 2020,” the MLA report stated, estimating that 2,650 pre-sale units are marketing though not yet started.
Still, construction of condos roars on with projects that came out of the ground over the past year or two. According to Canada Mortgage and Housing Corp. there are currently 36,293 apartments under construction across Metro Vancouver along with 2,782 townhouse units—about 8,000 of this combined total are rental units.
MLA estimates that 17 concrete high-rise condo projects have so far been shelved or postponed this year, totalling about 6,000 units.
Condo developers with projects already underway are offering an array of incentives, from free upgrades to mortgage discounts and reduced down payments, to keep projects on track. Industry sources say that if a planned project fails to achieve 50 per cent pre-sales during marketing, it is nearly impossible to acquire funding to complete the development.