"New presale project launch volume was in line with historical norms in October. Project competition remains extremely high as developers are having to cut through the noise by utilizing creative incentives to drive traffic and convert deals. The current patience on behalf of buyers is shown in the 10% same-month absorption, which is near decade-lows and indicates the trouble that developers have when it comes to hitting presale financing targets.” - Garde MacDonald, Director of Advisory
FALLING BELOW THE MARK THIS FALL
Developers showed confidence in the fall market with 14 new projects launched in October—up from 11 in September—adding almost 2,000 new units. While this uptick reflects optimism, the pace remains more subdued than last October, when 20 projects brought 3,200 units to market. Same-month absorption, however, fell short of expectations, reaching only 10% with 191 units sold. Although many launches occurred in the latter half of the month, which may have created downward pressure on absorption, sales ultimately missed the mark, falling well below the 30% to 50% absorption rates seen in the past three Octobers.
CANADA’S NEW IMMIGRATION TARGETS AND THE IMPACTS ON THE HOUSING MARKET
In late October, the federal government announced a reduction in its permanent resident intake, adjusting the 2025 target from 500,000 to 395,000. This move follows a recent decision to limit temporary residents to 5% of Canada’s population by the end of 2026. Additional cuts to permanent resident admissions are planned, with targets decreasing from 500,000 to 380,000 in 2026 and setting the target to 365,000 permanent residents in 2027.
According to the government’s press release, the revised immigration plan is expected to slow population growth by 0.2% over the next two years. The statement also indicated that the plan aims to narrow the housing supply gap, potentially reducing the need for around 670,000 additional housing units by the end of 2027.
The immediate impact of the new immigration targets will likely be felt in the rental market first, with a ripple effect expected to reach the presale market over time. An increasing number of purpose-built rental buildings on the horizon may help ease the upward pressure on rents as supply grows. However, even with these policy adjustments, the broader housing shortage remains significant, making it unlikely that rental rates will drop considerably.
CAUTIOUS CONDITIONS LINGER
As we delve further into the fall market and approach the holiday season, the November forecast reflects the subdued sales activity observed in October, projecting the launch of 10 projects that will introduce approximately 1,496 new units. This figure aligns with project launches observed in the previous two Novembers. It is plausible that some developers may choose to defer their launches until the New Year or spring, particularly in light of further anticipated interest rate reductions and the potential for increased buyer engagement in response to new incentives.
Although, after a prolonged period of stagnation, there are encouraging signs of a market resurgence with increasing sales activity noted in the resale market for both Greater Vancouver and the Fraser Valley. Buyers are beginning to respond to previous interest rate cuts, although the 50-basis point reduction announced at the end of October may not have influenced sales figures just yet. As we move into November, it will be important to observe whether buyer optimism has truly returned given these interest rate adjustments. Nevertheless, it is crucial to recognize that inventory levels remain high, and demand still requires strengthening.
Coming soon! Stay tuned for our fully comprehensive overview of the macroeconomics, presale, and resale market video report, Presale Pulse.
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