Developers stall condo launches as cost soar

August 29, 2022



July 2022 housing starts in Metro Vancouver fell 28 per cent compared to a month earlier, according to the latest data from Canada Mortgage and Housing Corp. (CMHC), while starts in Greater Toronto fell 16 per cent in the same period.
Analysts say record-high land prices, higher government charges and fees, and slumping pre-sales have persuaded some condo developers to stall projects.
“Many developers are holding new project releases for the fall 2022 or spring 2023 markets further restricting supply,” noted Suzana Goncalvas of MLA Canada, which monitors Vancouver’s pre-sale market.
Of eight Metro Vancouver projects launched in July with a total of 1,354 units, same-month absorption was 21 per cent – down from the 32 per cent average seen over the previous three months, Goncalvas noted.
Meanwhile, Vancouver-area residential sales through the multiple listing service were down 22.8 per cent in July from June, reports the Real Estate Board of Greater Vancouver.
Housing sales in the GTA plunged 24 per cent in July from a month earlier and were down 42 per cent from July 2021, according to the Toronto Regional  Real Estate Board.
Early Vancouver-area data shows the sales decline has continued into the first half of August.
“Vancouver is taking a break from real estate,” quipped Kevin Skipworth, managing partner with Dexter Associates Realty in Vancouver.
Across Canada, the annual pace of housing starts in July edged higher compared with June despite a slowdown in urban starts, CMHC reported.
Canada’s seasonally adjusted annual rate of housing starts in July was 275,329 units—up 1.1 per cent from June.
In Metro Vancouver, which includes Surrey and Langley, annual housing starts fell to 23,318 units in July—down from more than 32,300 in June.
Starts across B.C. were down 14 per cent to 45,527 new homes, CMHC reported. This is in sharp contrast to neighbouring Alberta where starts were up 9 per cent to a seasonally adjusted pace of 41,195 units.
Skipworth said early data shows the downward trend in housing sales, which began in March 2022, has extended into August, but that the supply of homes for sale is falling even faster.
“This will likely produce around 1,800 home sales for the month of August, which would be the least amount for that month since 1998,” Skipworth noted.