Vancouver Real Estate Developers Drop New Inventory By Over 95%

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Greater Vancouver real estate developers are launching less units – a lot less. MLA Canada numbers show July saw the fewest new pre-sale units launched in years. Developers have been delaying new releases in response to weak absorption. Fewer launches

Better Dwelling | Canada's Fastest Growing Real Estate Blog

Greater Vancouver real estate developers are launching less units – a lot less. MLA Canada numbers show July saw the fewest new pre-sale units launched in years. Developers have been delaying new releases in response to weak absorption. Fewer launches did help to firm up the absorption ratio, but even with the “firming” sales came in very low.

Pre-Sale Launches Falls To Lowest Level In Years

Greater Vancouver pre-sale launches last month were extremely low. Only an estimated 157 new pre-sale units hit the market in July, down 91.82% from last year. This number is even lower than expected, coming in 43.07% lower than forecasted. MLA has previously stated poor absorption is resulting in delayed or cancelled projects. Lower priced projects may also be waiting to cash in on the government’s first-time buyer incentive launching next week.

Greater Vancouver New Pre-Sale Real Estate Listings

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

Source: MLA Canada, Better Dwelling.

Vancouver Developers Only Sold 58 of The Pre-Sales

There was a sharp drop off in volume for sales of newly launched pre-sales. Only 58 of the pre-sale units launched in July were sold, which is 95.34% lower than last year. Even with the throttling of units, this isn’t a big number for sales. This was the fewest pre-sale launch sales for any month, in at least two years.

Greater Vancouver Pre-Sale Absorption Highest in Months

Much fewer launches helped to improve the sales to new listings ratio (SNLR). The SNLR reached 37% in July, down 43.07% from last year. However, it’s the highest the ratio has been since December 2018. The industry refers to an SNLR above 60% as a seller’s market, where prices typically rise. Between 40% and 60%, the market is considered balanced, and priced right. Below 40% is a buyer’s market, where prices typically drop.

Greater Vancouver New Home Pre-Sale Absorption

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

*MLA Canada number not available, Better Dwelling estimate based on inference data obtained from MLA.
Source: MLA Canada, Better Dwelling.

The headline detail seems to be that Greater Vancouver’s absorption picked up. That’s true, but the ratio still isn’t even at the balanced level yet. The industry is dropping the number of new project launches due to weak absorption. However, the number buyers for new launches appears to be dropping as well.

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