The Greater Vancouver housing pipeline remains fully bloated surpassing 44,000 units under construction as of the end of June, a fresh record high. Despite the softness in the housing market with home sales hovering near two decade lows to start the year, developers are still jamming through new projects at a record pace. Year to date (as of the end of June), housing starts hit 15,723 units, that’s up 25% from the same period last year.
While these housing starts are likely to ease prices further, ultimately aiding in the battle of affordability, they still need to find willing buyers. Per data from MLA Canada and Urban Analytics, pre-sale activity remains weak. Perhaps even threatening the viability of some of these projects. In June, MLA reported the pre-sale absorption rate at 14%, the lowest count since MLA began tracking the data in January 2018.
Urban Analytics second quarter data shows the growing divergence between sales and unsold inventory.
Buyers of course are the real winners here as the abundance of options are being further incentivized through increased bonuses and decorating allowances from developers. However, it’s not just property developers who are vying for the attention of buyers, condo flippers too are facing increased competition. The number of active assignment listings for sale has been increasing at a steady pace since the end of 2017.
There is clearly a cyclical phenomenon for assignments and a correlation to building booms, the last of which we experienced leading up to the great recession in 2008.