Pre-sale activity for concrete apartment units in Metro Vancouver has slowed down significantly due to the housing market downturn, according to a new report.
MLA Advisory’s April 2019 Pre-Sale Real Estate Insights states approximately 5,000 concrete units within 17 development projects have postponed their sales launches and are instead opting to await for more favourable market conditions.
“These concrete pre-sale project delays, along with decreases in housing starts by up to 20% province-wide, will have drastic longterm implications on our housing supply, affordability and home ownership,” reads the report, citing the impact of new government interventions and municipal regulations.
In the month of April, there were about 10 public sales launches, including five wood frame condominium developments in West Coquitlam, New Westminster, and Langley. Over 500 units of wood frame condominiums were released in more affordable eastern suburban markets, and an additional 542 units are anticipated for release in May.
Overall in April, there were 865 homes released across the Lower Mainland, with same month sales for new inventory reaching about 20%.
According to analysts, a ratio closer to 25% to 30% within the month is preferred to “make the remainder of sales needed to hit financing requirements more manageable over the nine month timeframe.”
But there is continued strong interest with entry-level housing, as the current market conditions have created a shift to end-users becoming more prevalent with greater purchasing power.
“As more projects offer purchaser incentives such as lower deposit structures and decorating allowances, it is becoming more favourable for end-users to purchase homes this year.”
To date in 2019, across the Lower Mainland, there have been over 3,800 pre-sale units launched, representing a decrease of 23% compared to the previous year. The forecast for May calls for 10 project launches offering a combined total of about 703 pre-sale units.