What’s a better deal, new or resale?
Although the MLS® condo market got off to a slow start in January, there’s still hope that sales will pick up over the next three to four months. For those potential buyers looking for an apartment or townhouse condo over the next few months, the following tables present a comparison of average MLS selling prices for newer condos (less than 5 years old) over the past three months and asking prices for new condo projects that started marketing in 2012. Keep in mind that the average asking prices for new apartment and townhouse condos exclude HST.
The data for new project prices and sizes are taken from the latest edition of the Condo Market Opportunities (CMOP) Report. The CMOP Report is the most complete and up to date analysis of the new condo market in Metro Vancouver. Its 500+ pages cover all new projects marketing and upcoming. It provides an in-depth analysis of present and anticipated market conditions for over 20 market areas as well as practical advice on pricing, product mix and features. For an evaluation copy contact Jeff Hancock: email@example.com.
The new high-rise market proved to be much more resilient than the MLS high-rise market in 2012. Unlike MLS high-rise sales, which are going through a meltdown, new high-rise sales in 2012 were actually up from 2011. A look at the average prices for newer high-rise condos sold on MLS against average asking prices in high-rise projects that started marketing in 2012 gives some clues as to why the difference.
In almost all markets, the average asking price for new high-rise condos is less than the average MLS selling price of newer units. Granted that buyers of new condos are getting a smaller unit, and once HST is added in, the price difference will decrease or even disappear. But buyers in a new project get the latest in features and maybe some developer goodies and giveaways.
New low-rise projects that started marketing in 2012 didn’t enjoy the sales success of new high-rise projects. Total low-rise sales for 2012 were down by about 400 units from the previous year. There are several reasons for poorer sales in new low-rise projects, but the main one is that new low-rise projects were more likely to target potential owner-occupants instead of investors. Also, it’s apparent from a comparison of average MLS prices for newer low-rise condos over the past three months that there’s not the price gap that is evident in the high-rise market.
In several of the major low-rise markets such as the City of Vancouver, Burnaby, Coquitlam, North Surrey and Langley, average prices in new low-rise projects were considerably higher than for newer units sold on MLS. An exception would be buyers looking at the Richmond market. They could get a much better deal in a new project.
Sales in new townhome projects in 2012 were also down from the previous year. The drop was not as steep as experienced in the MLS townhouse markets. Average asking prices in new townhome projects that started marketing in 2012 were generally considerably higher than average MLS prices for newer townhomes sold over the past three months.
Average asking prices in new townhome projects the North Surrey, South Surrey and Langley markets were lower than average MLS prices but that didn’t seem to help sales. New townhome sales in these markets were on a downward trajectory at the end of 2012.