New condo sales, starts plummet in Metro Vancouver

Only two new condominium projects with 200 units launched in the six weeks ending May 15, down 75 per cent from the same period in 2019

Photo: Dan Toulgoet

A pandemic panic may be settling into Metro Vancouver’s once robust condominium market, at least for the short-term. Presales of new condo units are down 50 per cent and new product launches had plunged 75 per cent as of mid-May, industry reports say.

Some buyers of pre-sale condos are now trying to unload their investment on Craigslist before the building opens.

According to the latest results from Altus Group’s Condominium Apartment Monitor, between the beginning of April and the middle of May, only two new condominium apartment projects launched in Metro Vancouver, with a total of just over 200 new units, down by almost 75 per cent from the same period in 2019.  

Year-to-date new supply is down about 15 per cent, with 3,000 new units brought to market since the beginning of the year –  the majority of which launched prior to mid-March when a global pandemic was declared. Sales volumes typically follow the new supply and, with the drop-off in project launches, pre-sales were down during this period by just over 50 per cent, Altus Group reports.

MLA Canada, one of Vancouver’s largest new condo marketing agencies, put an upward spin on the numbers, citing the uncertainty surrounding COVID-19.

"Sales volumes remain low overall and consumers need additional time to adapt to the new reality as we re-open the economy. However, we are cautiously optimistic as we see positive trends in inquiries into our presentation centres and increased sales from last month [April] in pre-sales,” said Suzana Goncalves, sales and marketing, partner at MLA.

Goncalves noted that B.C. began lifting pandemic restrictions on May 15.

“Accordingly, the majority of presentation centres expanded appointments and began offering regular drop-in hours to entice motivated purchasers. Despite this, many projects continue to experience depressed activity as economic, social, and financial uncertainty persist,” she said.

New strata developments that found success in May were largely townhome projects, mostly located in the Fraser Valley. Specific areas with high levels of activity were Langley and South Surrey, according to MLA Canada’s market survey released June 9.

While typical monthly pre-sale sold rates vary between 20 per cent to 35 per cent,  May was “significantly impacted by Covid-19” and experienced a pre-sale sold rate of only 10 per cent, MLA reported. 

A sign of the softening market for new strata units is the recent profusion of assignment sales by pre-sale buyers. An assignment is when the original buyer of a pre-sale condo sells their rights to the condo to another buyer before the condo is completed.

Western Investor counted three dozen such listings on the online listing service Craigslist July 1, or about twice the level our staff counted in January 2020. Under most pre-sale contracts, buyers are not allowed to list assignments on the multiple listing service of real estate boards.

A telling example is a new two-bedroom, two-bathroom condo apartment in Burnaby’s Metrotown that completes this October.  “Originally purchased for $841,800 but now assigning for $784,900,” the July 1 Craigslist ad reads. 

Western Investor