Vancouver Real Estate Pre-Sales Fall 62%, New Launches 31% Below Expectation

Dated: December 28 2018

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Vancouver Real Estate Pre-Sales Fall 62%, New Launches 31% Below Expectation

Greater Vancouver real estate pre-sales are slowing, and inventory is rising. Numbers from MLA Canada, one of Vancouver’s top real estate marketing firms, show a decline in new project sales in November. Fewer sales are pushing inventory higher, even with  delayed project launches.

Vancouver Real Estate Pre-Sales Fall Over 62%

Greater Vancouver real estate pre-sales are slowing very fast. There were 487 sales in November, down 51% from the month before. Last month’s number represents a 62% decline, when compared to the same month last year. A monthly decline was expected, but the percentage decline was nearly 7x as large as last year. The annual decline is pretty rough, anyway you try to spin that.

Vancouver Pre-Sale Inventory Rises Over 38%

New listings for pre-sale real estate spiked, but came in below forecasts. There were an estimated 1,298 new pre-sale listings in November, up 38.86% compared to last year. Even though there was a large inventory increase, it came in 31% below MLA’s forecast for the month. This likely means more projects are being delayed until this month, or even the new year.

Greater Vancouver New Pre-Sale Real Estate Listings

The number of newly available pre-sale units of new homes across Greater Vancouver.

New InventorySep 2017Oct 2017Nov 2017Dec 2017Jan 2018Feb 2018Mar 2018Apr 2018May 2018Jun 2018Jul 2018Aug 2018Sep 2018Oct 2018Nov 2018Dec 2018*05001,0001,5002,0002,500New Pre-Sale Listings
MonthNew Inventory
Sep 2017929
Oct 20171,838
Nov 20172,123
Dec 2017843
Jan 20181,020
Feb 20182,210
Mar 20181,572
Apr 2018879
May 20181,560
Jun 2018572
Jul 20181,921
Aug 20181,039
Sep 2018688
Oct 20182,418
Nov 20181,298
Dec 2018*1,724

*MLA estimate.

Source: MLA Canada, Better Dwelling.

Lower Sales, Higher Demand Means Softer Market

The sales to new listings ratio (SNLR) dropped as sales fell, and inventory increased. The SNLR reached 38 in November, down 36.66% compared to last year. The SNLR is a quick way to use same month absorption of new listings, to determine relative sales demand. When the ratio is above 60, it’s a seller’s market where prices generally rise. When it’s below 40, it’s a buyer’s market and prices should start to decline. Between 40 and 60 is considered a balanced market. Using this standard, we’re in a buyer’s market for pre-sale real estate.

Greater Vancouver New Home Pre-Sale Absorption

The ratio of sales to new listings of pre-sale homes across Greater Vancouver.

SNLRAug 2017Sep 2017Oct 2017Nov 2017Dec 2017Jan 2018Feb 2018Mar 2018Apr 2018May 2018Jun 2018Jul 2018Aug 2018Sep 2018Oct 2018Nov 2018020406080100Sales to New Listings Ratio
Aug 201790
Sep 201780
Oct 201775
Nov 201760
Dec 201763
Jan 201894
Feb 201870
Mar 201860
Apr 201843
May 201870
Jun 201848
Jul 201865
Aug 201844
Sep 201838
Oct 201841
Nov 201838

*MLA Canada number not available, Better Dwelling estimate based on inference data obtained from MLA.

Source: MLA Canada, Better Dwelling.

Greater Vancouver real estate pre-sales are down, while inventory is starting to rise. Delaying pre-sale inventory might help firm up the market, but pressure from the resale market may drag prices lower anyway. The condo resale market just made the single largest nose dive in the history of Vancouver’s benchmark price index.

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Steven Axford

Steve is a award winning Realtor in Victoria BC, with his listings selling faster and for top dollar! Growing up in Victoria, BC and has always been active in his community. Steve is a Victoria Cougar....

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