Welcome to the May 2024 episode of the Presale Pulse, a real estate show brought to you by hosts Suzana Goncalves and Brittany Reimer. Watch the video to understand the latest macroeconomics, presale, and resale trends over the last 30 days affecting the local real estate market across Metro Vancouver and the Fraser Valley.
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US Resilience and Canada's Concerns
The macroeconomic landscape in April showcased contrasting trajectories. While the U.S. economy maintained its robustness, indicated by sustained growth and manageable price pressures, Canada faced challenges with weakening economic activity. In the U.S., Nvidia's soaring stock prices and strong performance in the S&P 500 underscored the market's fervour, potentially prolonging the Federal Reserve's maintenance of lower interest rates. Conversely, Canada grappled with subdued GDP growth, prompting speculation about impending rate cuts by the Bank of Canada. This divergence in economic performance suggests differing monetary policies ahead, with the U.S. likely to maintain its stance while Canada contemplates adjustments to bolster its economy. The upcoming April inflation and jobs data will be pivotal in shaping the trajectory of central bank decisions in both countries.
April's Presale Market Finds Momentum
The Greater Vancouver presale market experienced a surge in activity in April, reflecting a vibrant Spring season. 17 projects were launched, introducing over 1,600 units into the market, a notably higher pace compared to the past three years. The Fraser Valley emerged as a significant contributor to this influx, with project launches spanning Surrey, Langley, and Abbotsford. Despite the robust launch numbers, sales performance exhibited variance across projects, with some achieving substantial sales figures, while others lagged behind. Overall, 502 units were sold from April launches, representing a same-month absorption rate of approximately 31%. However, this figure remains 10% below the three-year average, indicating some challenges in the market. Factors such as affordability and pricing incentives continue to influence buyer behaviour, with projects at the higher end facing stiff competition. May is forecasted to be even busier, with 15 launches expected, bringing nearly twice the inventory into the market, including anticipated high-rise concrete towers like Ironwood by Qualex-Landmark and Pine & Glen by Onni. Developers are gearing up for increased momentum, particularly in anticipation of potential rate cuts in the upcoming summer months.
Resale Market Balancing Act
In April, the Greater Vancouver resale market exhibited signs of both improvement and underlying challenges. Sales activity saw a notable uptick, marking the fourth consecutive month of increased activity, with 2,831 sales recorded, reflecting a 17.2% increase from the previous month and a 3.3% increase from 2023. However, despite these positive trends, sales remain 12% below the ten-year seasonal average, indicating a lingering recovery process. At the same time, the inventory side experienced significant growth, with active listings reaching 12,491, the highest since summer 2020 and approximately 17% above the ten-year seasonal average. This surge in available homes can be attributed to various factors, including mortgage renewals, changing rental dynamics, and the anticipated capital gains tax changes. While purchasers remain cautious, observing market dynamics amidst expectations of rate cuts, sellers are active, leading to a surplus of inventory. This abundance of available homes, coupled with cautious buyer sentiment, presents favourable conditions for purchasers, offering increased negotiating power. Despite the current imbalance between supply and demand, benchmark prices continue to show slight appreciation, with values hovering around $1,205,000. The upcoming months are poised to witness continued fluctuations, with sellers driving activity while buyers exercise caution, awaiting further market developments.
Presale Projects mentioned in this episode:
- Portico by Wanson Group
- Azure Grove by ML Emporio
- Parkway 2 by Bosa
- Walnut Park by Quadra Homes
- Ironwood by Qualex-Landmark
- Town & Centre - Mosaic
- PIne & Glen - Onni Group
- Westview by Trillium Projects
Links mentioned in this episode:
- May 2024 Presale Pulse Report
- MLA Advisory Services and Sample Reports
- Contact Advisory
- Subscribe to MLA Newswire
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