While home sales across the Lower Mainland slowed in the last half of 2016 in response to government initiatives such as the introduction of the 15% foreign buyers tax and new federal mortgage rules, one real estate sector has been relatively unaffected.
The pre-sale concrete condo market did not slow as much as other sectors in 2016, according to a new report by MLA Canada, a real estate service company formed by MAC Marketing Solutions and BLVD Marketing Group, and this stability will continue this year.
“The various government interventions have shown little effect on the pre-sale market to date, and with over 10,000 concrete units currently being planned for 2017, Greater Vancouver will continue to have steady absorption figures,” the firm said in a press release.
In 2016, 8,955 pre-sale concrete condos were released for sale across the region, with Coquitlam having the highest number at 1,861, followed by 1,784 units in Burnaby’s Brentwood area. In East Vancouver, 444 units were started, followed by 626 units in North Vancouver and 879 downtown.
The number of units released is expected to jump almost 20% to 10,708 this year. More than a quarter of these—2,886—will be in Burnaby Brentwood. The next highest activity will be in Burnaby Metrotown, with 1,795 units forecast, followed by Richmond (1,347) and Coquitlam (1,202). Forecasts for Vancouver include 247 units in East Vancouver and 1,094 downtown.
Pre-sale-condo supply is high in Vancouver due to a record number of housing starts in 2016, although starts are not expected to continue at the same levels.
“Paired with continued low interest rates, steady population growth and stable employment trends, expect to see demand keeping up with supply, maintaining relatively constant activity levels and more modest price increases compared to 2016,” MLA said.
The most active market for pre-sales last year was Coquitlam, which MLA said ended 2016 with 1,800 units released, due in large part to the anticipated completion of the Evergreen SkyTrain extension in December.
MLA points out there is a large degree of uncertainty this forecast, particularly relating to the upcoming provincial election and the new administration in the United States, that could lead to “major shifts” in this forecast.