I had some of my comments featured recently in a Vancouver Sun article tilted, “Vancouver’s Luxury Builders should be nervous“. I’d like to add some further context as sometimes words can be misunderstood. There’s no doubt a trend transpiring across global property markets, a surplus of new luxury homes sitting on the market. A huge reason for this is the pullback from Chinese investment. Recent weakness in the Chinese economy, combined with tighter currency controls, has left property developers across the world, scrambling to fill the void. Vancouver is just one of many cities facing the same difficulties, if you want to call it that.
The housing market has basically switched back to a more local driven market, that has become increasingly price sensitive. This has left some developers with a glut of luxury homes. See case and point below for available inventory in some of Vancouver’s more expensive projects – courtesy of our friends over at Altus Group.
The pre-sale market has certainly shifted from the boom years of 2015/2016 when capital flight out of China ultimately peaked. As a result, more developers are transitioning to purpose built rental development (currently at record highs) and product that caters more towards affordability, which is still under supplied.