July 2022 Pre-Sale Real Estate Market Insights
THIS EPISODE IS NOW AVAILABLE IN AUDIO
In our August 2022 episode of the Fraser Valley Presale Pulse, President of MLA Canada, Ryan Lalonde, and Managing Director for the Fraser Valley, Brittany Reimer dive into the latest pre-sale and resale data that are affecting the real estate market today.
“If the September announcement from the Bank of Canada is indeed the last interest rate hike, investors and experienced real estate market home buyers will likely begin to fuel demand for both resale and presale product – which will not require buyers to lock in the historically high rates of today, and instead capitalize on potentially lower rates in 2 to 3 years’ time.”
– Brittany Reimer, Managing Director, MLA Canada Fraser Valley.
PRESALE DEMAND SOFTENS IN THE FRASER VALLEY MARKET
We are seeing the softening in demand and absorptions in the Fraser Valley, like the declines we are experiencing in the resale market. Despite this decline, the presale market in general has performed better comparatively to the resale market. The currently level of activity aligns with what we see historically at this time of year, which is typically a quitter time as many families are travelling during the summer months.
Surrey, more specifically Surrey City Centre, continues to be the focus of the Fraser Valley. July saw the launch of Elwynn Green by Elegant Development, and we anticipate the launch of The Piano and Georgetown 2, both located in Surrey City Centre. Surrey is also amid planning an extensive, $40 million, two level expansion to the Chuck Bailey Recreation Centre. Construction is expected to begin next Spring for a 2024 completion and is a significant project that will add a lot of value to an area that is already receiving a lot of attention.
Launch activity has similarly cooled as developers strategize the feasibility of projects, and when the best time to launch may be. Due to this, we are experiencing a lull as the overall economic anxiety in the market is coinciding with a typical summer market. This presents opportunities for home buyers and savvy investors. For the first time in nearly 2 years, a homebuyer can lock in on current day pricing for a presale home with an affordable deposit and leverage the inflationary market pressures on price appreciation. As buyers return to Metro Vancouver and as the market begins to pick up again in the Fall, many will be looking to capitalize on early Fall opportunities in market.
SALES TO LISTING RATIOS
Fraser Valley is beginning to see a more balanced markets, as detached homes reside in a buyer’s market at 11%, while townhomes are balanced. Condos continue to remain firmly in a seller’s market but expect selling conditions to follow suit in the coming months.
The changing metrics have led the HPI Benchmark Price to decline in recent months, dipping between 2-3.5% month-over-month depending on the product type. This is far less than market sentiment and headlines might have you believe. Although sales have been declining throughout most markets – not just the Fraser Valley – it’s important to remember that the previous run-up we had was so significant that prices remain up nearly 20% on a yearly basis. Realistically, with rising land costs, a lot of product in the market is going to be priced below replacement, supporting prices over the medium and long term.
For the latest real estate market data on Greater Vancouver, watch the latest video featuring Ryan Lalonde and Suzana Goncalves.
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