Greater Vancouver Pre-Sale Real Estate Sees An Unexpected Rise In Units For Sale

Greater Vancouver Pre-Sale Real Estate Sees An Unexpected Rise In Units For Sale

Greater Vancouver real estate is seeing softer demand for pre-sale units. Numbers from MLA Canada, a Vancouver-based real estate advisory firm, show more pre-sale units hit the market than expected in October. At the same time, same month absorption has continued a trend of declines.

Greater Vancouver Pre-Sale Real Estate Sales Rise Over 31%

The number of pre-sale units launched jumped last month. MLA found 2,418 new units hit the market in October, up 251.45% from the month before. Compared to the same month last year, the number is 31.55% higher. The monthly jump is large, but not all that important. A few projects saw their September launch date pushed to October. The annual increase is of note however, coming in much higher than previous years.

Also worth noting how much higher this number was than forecasted. The 2,418 units released is actually 15.91% higher than expected for October. The unexpected rise likely indicates future projects had their launch date accelerated.

Greater Vancouver Pre-Sale Absorption Down Over 45%

The same month sales of new projects, a.k.a. absorption fell from last year. October saw 41% of units absorbed, up 7.89% from the month before. This represents a 45.33% decline compared to the same month last year. The monthly increase is very high, but remember these numbers aren’t seasonally adjusted. Instead, of showing a rise, it’s more indicative of projects holding off launch for a month. The annual change is much more important here, and it isn’t bullish.

Same month absorption, is also called the sales to new listings ratio (SNLR). The market is considered “balanced” when the SNLR is between 40 and 60 percent. Above that the market is a seller’s market, generally meaning higher prices. Below that and the market is considered a buyer’s market, generally meaning lower prices. The important takeaway is where this trend is heading, which doesn’t look higher right now.

Greater Vancouver New Home Pre-Sale Absorption

The ratio of sales to new listings of pre-sale homes across Greater Vancouver.

SNLRAug 2017Sep 2017Oct 2017Dec 2017Jan 2018Feb 2018Mar 2018Apr 2018May 2018Jun 2018Jul 2018Aug 2018Sep 2018Oct 2018020406080100Sales to New Listings Ratio
MonthSNLR
Aug 2017 90
Sep 2017 80
Oct 2017 75
Dec 2017 63
Jan 2018 94
Feb 2018 70
Mar 2018 60
Apr 2018 43
May 2018 70
Jun 2018 48
Jul 2018 65
Aug 2018 44
Sep 2018 38
Oct 2018 41
 

Note: MLA did not have November 2017 absorption rate available.
Source: MLA Canada, Better Dwelling.

Greater Vancouver Expects Fewer New Units Launched This Month

Greater Vancouver is anticipating fewer new units for sale this month. MLA is forecasting 1,897 units launched in November, down 10.64% compared to last year. The number is still 45.97% higher than the median number of monthly units launched. The drop in units is, once again, anticipated. Some projects expected to launch in November moved up to October.

Greater Vancouver New Pre-Sale Real Estate Listings

The number of newly available pre-sale units of new homes across Greater Vancouver.

New InventorySep 2017Oct 2017Nov 2017Dec 2017Jan 2018Feb 2018Mar 2018Apr 2018May 2018Jun 2018Jul 2018Aug 2018Sep 2018Oct 2018Nov 2018*05001,0001,5002,0002,500New Pre-Sale Listings
MonthNew Inventory
Sep 2017 929
Oct 2017 1,838
Nov 2017 2,123
Dec 2017 843
Jan 2018 1,020
Feb 2018 2,210
Mar 2018 1,572
Apr 2018 879
May 2018 1,560
Jun 2018 572
Jul 2018 1,921
Aug 2018 1,039
Sep 2018 688
Oct 2018 2,418
Nov 2018* 1,897
 

*MLA estimate.
Source: MLA Canada, Better Dwelling.

Greater Vancouver is seeing the pre-sale market softening, but it’s not alone. The resale market is also experiencing softer sales, and slower price appreciation in recent months. Where the speculators at?

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Contributing editor, and data sherpa.

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