The growth in Surrey has caught my attention for quite some time. It’s been an attractive growth city given job creation and the relatively more affordable housing prices. It should be no surprise that the annual population growth is just over 2.5% and more than double the city of Vancouver where the cost of living is out of reach for many.
Given the cities growth and the sharp run-up in prices elsewhere, developers have been pretty bullish on the Surrey market. The relatively affordable land prices in years prior sparked a sharp increase in residential land development sales. Per Altus Group, annual land sales for the purpose of residential re-development began increasing in 2014, and more than doubled just two years later.
New home sales have also been strong and steady up until the end of 2018. Although, they have since fallen off markedly in 2019. This shouldn’t be overly surprising given new home prices are reaching levels well beyond what is deemed affordable for the area (one of the main reasons people move to Surrey), Concord Pacific’s Park George high-rise reached average sales prices of $875/sqft, record highs for the area.
Given the recent slowdown, which has seen the MLS benchmark price of re-sale condos fall by over 10% since peaking at the beginning of 2018 it will may be challenging for migration into the area to absorb the wave of supply coming. Units under construction remain elevated and developers are still pushing projects through the pipeline. There are currently 17,876 condos/townhomes still going through the development application process.