Vancouver developers warned “the end is nigh”

May 18 2018

Metro Vancouver condominium developers were warned of a potentially sustained downturn after housing sales in April plunged by double digits compared to a year ago. April is traditionally one of the strongest months of the year, signaling the start of the spring selling season.
But this April, just 43 per cent of pre-sale condos offered in Metro Vancouver sold compared to 94 per cent in January, 83 per cent in February and 63 per cent in March, said Cameron McNeill, a partner in MLA Canada, a real estate marketing firm which hosted a Pre-Sale Pulse seminar to discuss the outlook for new condominium development.
In the resale sector, April sales of detached houses fell 34 per cent through the Real Estate Board of Greater Vancouver, compared to a year earlier, while townhouse and condo sales were down 25 per cent and 24 per cent, respectively, in the same period. Sales have been tracking lower through the first quarter of this year in reaction to a series of government measures, including an increase in the provincial foreign-home buyer tax and federal mortgage restrictions.
Vancouver lawyer Richard Bell, executive vice-chair and founder of Avesdo Inc., which supplies software marketing solution to developers, told the May 8 real estate seminar that the Vancouver new home market has seen an “incredible run over the past 10 to 15 years.” But, he added, “We all knew it would come to an end and the end is nigh.”
The warning comes as Metro Vancouver condominium starts are nudging record highs. MLA forecasts that 11,064 pre-sale condos will be released this year, compared to 8,338 in 2017.
McNeill said that the fundamentals remain in pace for a strong Metro Vancouver housing market: an estimated 40,000 immigrants arriving annually, relatively low mortgage rates, low unemployment and a robust economy.
McNeill, however, said condo developers could expect slower sales over the next few months. He added that, like the last downturn in 2008, people would likely be surprised at how quick the recovery will be.
“This is Vancouver,” agreed Bell, ”it will come back.”