Sluggish pre-sale activity in Metro Vancouver at the start of 2023
Over the first three months of 2023, the first quarter of the year, a total of 1,661 new homes were released into the pre-sale market across the Lower Mainland.
According to a new MLA Canada market update bulletin, this includes 916 units within the Real Estate Board of Greater Vancouver’s jurisdiction and 745 units within the Fraser Valley Real Estate Board’s jurisdiction (which includes some Metro Vancouver municipalities including Surrey).
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These pre-sale units were released within 14 projects across the region, including 1,102 concrete homes, 181 wood-frame homes, and 378 townhouses.
But how do these figures compare to the same period in early 2022, before the Bank of Canada dropped the curtain on historically low interest rates?
The number of project launches is 65% down year-over-year, and the number of pre-sale units is down 70% year-over-year.
Out of the 1,661 new homes that were released for pre-sale over the first quarter of 2023, 711 units, or 43%, were sold. This is well below the 74% sold rate over the first quarter of 2022, just before the curtain drop.
MLA Canada analysts also provided some project performance examples over the quarter.
Of the 363 concrete homes released by Anthem Properties for their South Yards project in Burnaby’s Brentwood district, 310 units were sold — an 85% sold rate. It had a $1,250 price per square foot (ppsf).
But the concrete project of Lucent by Landa Global Properties in Surrey City Centre had a sold rate of just 42%, with 170 out of the 404 released units sold ($1,020 ppsf).
Woodframe project launch examples also saw a lower performance. Polygon Homes’ Lennox wood-frame building in North Vancouver sold 35 of the 64 released homes ($1,240 ppsf), while Redekop Faye’s Jacob project in Abbotsford also sold 35 out of the 70 released homes ($700 ppsf).
For townhouses, Soto on West 28th Avenue in Vancouver’s Westside sold six out of the 20 units released ($1,700 ppsf), while The Loop in South Surrey sold 36 out of 43 units released ($650 ppsf).
MLA Canada notes actively listed resales at the end of March 2023 were the lowest in over 20 years, and demand has fallen to levels not seen since 2009 amidst the financial crisis.
“Low inventory has helped buoy prices and kept purchasing conditions in favour of sellers. Consequently, as lending conditions improve, supply will overtake rates as the major hurdle for those wishing to enter the market,” reads the bulletin.