Greater Vancouver is experiencing 10-year lows in home resale inventory, and pre-sale units are being absorbed almost as fast as they are released – pushing prices far above even last year.
However, there could be some relief in sight, if all the projects slated for completion during the second half of this year finish on time, according to a mid-year update from real estate marketing company MLA Canada.
Around 4,200 new attached units (condos and townhomes) completed between January and June 2017, in 38 buildings, with 88% of new homes released in the first quarter sold, and 82% absorption in Q2. Just five townhome projects were released in Q2 of 2017 and all are over 90 per cent sold, said MLA.
However, more than double that total number, at least 9,390 new attached units in 73 developments across Greater Vancouver, are slated for completion between July and December 2017.
MLA’s research division MLA Advisory, which compiled the Mid-Year Market Review 2017, broke out the numbers of anticipated new units by city. It revealed that Burnaby would see nearly half of all those new units, with 4,000 new homes slated for release in the second half of the year, versus just 250 completed Burnaby homes in the first half.
Vancouver is expected to increase its output only slightly in the second half, to 1,550 new units between July and December, compared with 1,150 in the previous six months.
Vancouver’s total is closely followed by Coquitlam, which is expected to more than double its output to 1,270 new attached homes in the second half of 2017.
The report also looked back on the effects of the foreign buyer tax, which was launched one year ago today (August 2).
MLA said, “The foreign buyer tax made no real impact long-term in curbing demand or activity in the real estate market.”
The report added, “The real estate market in Vancouver showed signs of decreased activity before the 15% Foreign Buyer Tax was introduced back in August of 2016. The sales-to-active listings ratio has now resumed to levels seen prior to the tax.”
The report observed that the make-up of home sales has changed since spring last year, pointing out that the proportion of home sales that are detached home has fallen from around 45% in February 2016 to around 35% today. However, the decline in detached homes’ share of the market occurred between February and August last year, when it was around 30%, and it has since climbed to around 35%.
View the full Mid-Year Market Review 2017 report