Greater Vancouver new home sales have been softer than last year, but inventory is drying up. Data from MLA Canada, a Vancouver based real estate firm, shows new project launches made a big decline in October. Falling new unit launches, follows soft sales leading up to last month. In response, developers have been delaying and cancelling new units, helping to improve absorption.
Greater Vancouver New Home Inventory Launches Fall Over 72%
The number of new units launched across Greater Vancouver made a very sharp decline. There were 671 units launched in October, down 31.39% from the month before. This represents a 72.24% decline compared to the same month last year. The number is also 31.39% lower than forecasted for the month. Developers in Greater Vancouver have been cancelling and delaying projects. Most are waiting for demand to return.
Greater Vancouver New Pre-Sale Real Estate Listings
The number of newly available pre-sale units of new homes across Greater Vancouver.
Source: MLA Canada, Better Dwelling.
Greater Vancouver Launch Sales Fall Over 69%
Greater Vancouver pre-sales launched in the month sold much fewer units. There were an estimated 302 sales in October, down 14.20% from the month before. This represents a decline of 69.52% from a year before. A monthly decline is expected in October, and an annual decline isn’t typically.
Greater Vancouver Pre-Sale Absorption Improves
Falling inventory launches helped to improve absorption. The sales to new listings ratio (SNLR) was 45% in October, up from 41% last year. Generally speaking, the market is a buyer’s market when the ratio falls below 40% – when prices fall. Above 60% is a seller’s market, where prices rise. Between 40% and 60% is considered balanced, and prices are technically where they should be.
Greater Vancouver New Home Pre-Sale Absorption
The ratio of sales to new listings of pre-sale homes across Greater Vancouver.
*MLA Canada number not available, Better Dwelling estimate based on inference data obtained from MLA.
Source: MLA Canada, Better Dwelling.
Vancouver’s pre-sale market is being engineered, but it’s unclear how the dynamic holds. Holding back launches does help remove downward pressure on prices. However, it also means a backlog of future inventory is building. Combine that with existing unabsorbed inventory, and the market needs a flood of new capital to bolster prices.
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