January 15, 2024 January 2024 Presale Report: Early Signs of Lunar New Year Momentum

“While the presale market remained relatively dormant in December, there were a handful of launches that saw strong early sales absorptions. These projects came to market against little competition and as a result, saw strong same-month absorptions. All eyes will now be on the Lunar New Year as presale developments, both active and upcoming, aim to achieve necessary presale requirements. Incentives will start in late January and carry forward into February, and early signs are indicating strong incentive offerings across active markets.”   - Garde MacDonald, Director of Advisory

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KEEPING CALM AND CARRYING ON THROUGH THE HOLIDAY SEASON 

For those with active programs, it may have felt like the presale market went on holiday in December, replacing ‘For Sale’ signs with wreaths and yuletide decorations. However, despite the seasonal slowdown, some significant project launches took place, demonstrating strong market absorption. 

Mosaic's Town & Centre, which opened for sales in early December, is a prime example. This development quickly captured market attention, selling over 50% of its inventory (around 130 units). Its success can be partly attributed to its unique position in the market. It marked the first opportunity to purchase in the Coquitlam Centre area in six years, making it a highly anticipated project. 

Similarly, South Yards (Tower B) by Anthem made a quiet yet impactful entry into the market. Despite the low-key approach, it managed to sell an impressive 70% of its available inventory. The success of these programs highlights their strategic launches in markets with limited active competition, allowing them to stand out and attract buyers effectively. 

This trend suggests that even in traditionally slower months for real estate, well-positioned and anticipated projects can achieve significant sales, challenging the norm of the holiday season being a quiet period for the property market. 

REAL ESTATE IN 2024: WHAT TO EXPECT WHEN YOU’RE EXPECTING (SHIFTS IN OUR MARKET) 

As we venture into 2024, the housing market is poised at a crossroads, facing both challenges and opportunities. The year is expected to be a test for both developers and homebuyers, yet the long-term prospects remain hopeful, pointing towards long-term growth within the residential market. 

A key topic of discussion will continue to be interest rates, with many economists speculating upwards of 3-4 cuts throughout the year. However, this should be taken with a grain of salt as the reliability of these forecasts is moderate at best. While it’s reasonable to expect rates to come down, it’s still too early to say by how much or when.  

Even while rate cuts may influence market sentiment, their impact on actual affordability is as well debatable, as the gap in what buyers are willing to pay and what sellers are willing to sell their home for remains significant. We’re expecting some price discovery, especially in markets where homes are thinly traded or haven’t seen many launches in the last 6-8 months. 

Despite the challenges confronting our market, there's a prevailing awareness among buyers that robust immigration and rising construction costs are likely to exert sustained upward pressure on home values over the medium and long term. Consequently, we can expect presale activity to remain robust through the next year. 

PRESALE MARKET SEES MODERATE START TO THE YEAR 

Three presale launches are forecasted for January, bringing 785 units to market. These programs include Soenhaus by Marcon and Piano by Concord Pacific, a long-awaited concrete tower set to launch in Downtown Surrey in late January. 

While uncertainty in the market is likely to persist until we have further clarity on the direction of interest rates, we are beginning to see a strong marketing push in the lead-up to the Lunar New Year. Expect to hear more on Grosvenor’s Brentwood Block, Streetside’s Juno, and Qualex-Landmark’s Ironwood. 

Coming soon! Stay tuned for our fully comprehensive overview of the macroeconomics, presale, and resale market video report, Presale Pulse.

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