New condo sales in Metro Vancouver dropped 19% in 2018: report
Another report provides another indicator of the Metro Vancouver housing market’s downward trajectory.
Altus Group’s recent National New Home Outlook report notes newly-constructed condominium sales in the region dropped by 19% in 2018, which is compounded on top of the 31% drop recorded in 2017.
Conversely, in 2016, there was a 49% year-over-year increase in sales for this housing type.
“The frenzied pace in the market has softened with the sales rate at launch moderating, while price growth has stopped and even pulled back in certain segments of the market,” reads the report.
“A key challenge that has become more apparent as of late has been the price sensitivity of consumers, with higher priced projects, or those priced above the competition, experiencing below average sales rates.”
But new project launches, particularly along transit lines and in the Fraser Valley, added much-needed inventory and boosted the supply to 3.3 months’ worth of inventory. However, this is the lowest volume in the country.
New condominium sales in the Vancouver market are anticipated to see a modest dip in 2019 due to consumers reacting to higher borrowing costs, and developers reacting to escalating construction costs in the face of lower revenue opportunities. But the report notes that sales volumes in 2019 are still anticipated to be at or close to the market’s 10-year sales average.
Across Canada, new home markets have encountered increased government regulations, higher interest rates, and new taxes and increased development charges.
Even higher new condominium sale drops of 48% and 49% were recorded in Edmonton and the Greater Toronto Area, respectively, last year. But sales were strong in Hamilton, Montreal, and the Kitchener-Waterloo area, with growth rates of 19%, 31%, and 69%, respectively.
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