Metro Vancouver’s residential presale market is getting some momentum thanks to a new supply of presale properties.
Just over 3,500 presale units across 20 projects hit the local market last month, according to a Nov. 13 report from real estate agency MLA Canada.
This influx of units – everything from condos to townhomes – represents the “largest release of inventory seen in 2023” for presales, the report said. Most of these units are concentrated in Burnaby’s Metrotown area.
“October was a massive month for the release of new supply. Although this is encouraging to see, we are witnessing softer demand than seasonally expected given overarching macro forces and consumer sentiment,” Garde MacDonald, director of advisory at MLA, said in a statement.
In comparison, September 2023 had approximately 481 presale units hit the market across four projects, according to the report.
Just over a quarter (27 per cent) of the units that hit the market in October were sold within the same month.
The MLA report said a “favourable” market would have sold 30 per cent of those units.
“Despite this, the absorptions rate is relatively robust in the context of the amount of inventory released last month, particularly for well-positioned product,” said the report.
“Moving forward, recent improvements to rate stability should continue to support absorptions, with stand-out projects able to achieve high sales numbers in short time frames.”
MLA forecasts about 1,460 units across nine projects will hit the market next month compared with the 1,000 units that hit the market the same time last year, according to the report.
The report said developers’ decision to offer new presale units at this time is “strategic”, owing to expectations that interest rates will fall next year.
“In current market conditions, developers launching now are in part looking to capitalize on the ‘early-mover advantage.’ While a spring 2024 launch may bring more favourable macroeconomic conditions, going now allows developers a longer runway to establish brand recognition within a market, to create a robust Realtor and buyer database, and to build trust with potential purchasers,” said the report.
This will also allow developers time to get some units sold before rates decrease and competition in the market starts to heat up, according to MLA.