June Real Estate Market Data & Insights
THIS EPISODE IS NOW AVAILABLE IN AUDIO ONLY
"As expected, market levels have hit a strong but more sustainable level as we enter the summer. Although technically down from our historic peak in March, overall market activity remains quite high and added presale inventory will provide options for buyers as we see current conditions level off through to the Fall." Suzana Goncalves EVP, SALES AND MARKETING; PARTNER, MLA CANADA.
PRESALES STEADY AS THE MARKET FRENZY COOLS
Despite a slight reduction in resale market activity following a historic March, the presale market has been very consistent. In June, there were 15 new presale projects that began selling, releasing 1,307 condominium and townhome units to market. Of the newly released units, 42% sold in June, marking the fifth consecutive month of 40%+ presale absorptions. Broken down by product type, there were six townhome, five wood frame condominium, and four concrete condominium projects that launched sales campaigns in June. Similar to the past few months, there was concentrated market activity in Vancouver, the Tri-Cities, as well as Maple Ridge, reinforcing that market demand is wide-spread both in terms of product type and price point. Notably, Reliance Properties released 2 Burrard Place in June, which is the first presale project downtown to successfully launch since 2017. The early interest in 2 Burrard Place will likely encourage other downtown developers to take their projects off pause and release new units, something that the downtown market desperately needs.
SUMMER HOLIDAYS AND SOLID MARKET ACTIVITY
Almost half of our Canadian population is now fully vaccinated and as restrictions in the province start to ease people have turned their attention to domestic travel, visiting friends and family they have not seen in months and enjoying the particularly hot weather. We have seen this impact the overall market as listings and sales are down slightly in June and to which we expect it to continue through July and August. Broadly speaking, the overall market is still strong and active with almost 6000 transactions between Greater Vancouver and the Fraser Valley and we have found a more sustainable market level down from the March peak. We expect this more realistic but active market level to continue into the Fall and of course, longterm, with border openings on the horizon, we expect to see the market continue to escalate. We should also see patient buyers benefit from the summer slight slowdown rather than the torrid, multiple offer landscape in the spring.
SECOND WAVE OF PRESALE PROJECTS UPCOMING
Reduced market demand in 2018 and 2019 caused developers all over the Lower Mainland to put their projects on pause and reevaluate product design amid stagnant price growth. This, combined with the Covid-19 pandemic, made the market outlook incredibly uncertain during the Spring and Summer of 2020. However, as we have seen over the past six months, both resale and presale market activity has been historic, instilling confidence in the development community that presale financing can be achieved and new projects can be brought to life. Interestingly, as older projects sell successfully, we are beginning to see newly approved projects come to market. With this in mind, MLA Advisory forecasts 2,151 new presale units coming to market in July across 17 projects. Broken down by product type, there will be 12 new condominium projects and 5 new townhome projects. These projects are spread across the Lower Mainland and Kelowna - which will see two mixed-use, highrise developments come to market this summer. Furthermore, Block by Amacon in Downtown Vancouver will be the second presale project in that market in as many months, indicating increased demand in the premium segment of the market. For reference, the last successful launch in Downtown Vancouver was four years ago in 2017.