We are thrilled to unveil the MLA Intel 2024 report, our annual market intelligence spanning BC's presale real estate market. This new edition offers a comprehensive overview of the past year's market conditions and shares our perspective as we move into 2024.
FUNDAMENTALS: CANADA'S PATH OF PROGRESS AND CAUTION IN 2023
In 2023, the economic landscape underwent a notable transformation. Although inflation eased from its peak, it remained elevated due to rising shelter costs. The stock market experienced a recovery, achieving a 24% gain, driven primarily by the technology sector. As such, the Bank of Canada adopted a more modest stance on rate hikes in 2023, signalling a potential end to the tightening cycle, though pre-pandemic rate levels are unlikely to return. GDP growth displayed signs of cooling, masked by population growth but evident in per-capita terms. Finally, consumer confidence increased with expectations of housing market appreciation, yet there was a slight retreat in household spending expectations, indicating a cautious outlook for the near future.
PRESALE AND RESALE MARKET SUMMARY: SEASONAL SHIFTS AND RATE CYCLES
Greater Vancouver's presale market in 2023 started the year with signs of price recovery and offered hope for projects delayed in 2022. This momentum continued through late Spring and early Summer, marked by a surge in launches, particularly concrete towers in West Coquitlam and Burnaby during the Fall. On the resale front, the market displayed resilience despite historical challenges, with demand steadily increasing in the first half of the year. However, the second and third quarters experienced downward pressure due to seasonal factors and the resumption of the rate cycle, impacting buyer activity.
FORECAST: DEVELOPER STRATEGIES IN A SHIFTING LANDSCAPE
The real estate presale market faced numerous challenges in 2024, grappling with low affordability, rising prices, and volatile construction costs. Amidst these challenges, well-capitalized developers with strong networks stand a better chance of success. On the presale front, demand for presale products is expected to remain stable, mirroring 2023, with potential ease in pent-up demand as interest rates decline. Government initiatives like GST relief on new rental constructions and potential tax reductions may invigorate the rental sector. However, the high investment costs and regulatory barriers continue to complicate the landscape for purpose-built rentals. Developers are likely to proceed cautiously, particularly with new projects, in anticipation of legislative changes promoting higher density.
In addition to expanding on the above in-depth, the MLA Intel 2024 report contains:
- Rental market summary
- Key market spotlights: Victoria and the Okanagan
- MLA Canada's 2023 Residential Developer Survey
- 2023 Policy Timeline
- Product development interior design and amenities trends
With insights and analysis from MLA Advisory and MLA Canada's leadership team, the report is for everyone seeking a head start on real estate in 2024.