The renewed vigour seen in Vancouver home sales over the past few months is so concentrated in the single-family homes segment, it appears to be dissuading some condo developers from bringing new projects to market.
In both the resale and new housing markets, single-family sales have bounced back to exceed levels seen in 2019. Altus Group reported earlier in the month that sales in this segment have jumped 59 percent in the first six months of 2020 compared to the same period in 2019.
Meantime, new condo sales have fallen 30 percent during the same period compared to a year ago.
In data published earlier this week, Altus Group said that there have only been 3,221 units launched through new condo openings between January and mid-August. That’s down 23 percent from the previous year, which as the real estate research firm’s Ryan Wyse writes, was already considered a slow year for new condo supply entering the market.
A point to consider is would sales in the new condo segment be so low if builders brought more units to market during this time? While it may have moved the needle and there certainly are examples of successful Vancouver condo launches proceeding during this period, one only has to look toward the resale market to get an idea of why builders are hesitant.
While both single-family homes and condos have seen resales surge in recent months, the former recorded a 55 percent increase in August while the latter saw a 19.4 percent rise.
With the fall market picture remaining uncertain, many builders appear to be weighing continuing to sit on the sidelines.
But that’s not to say no one has taken the plunge. Already, more builders have launched condo projects in the third quarter’s first half than in the spring and early summer. According to Altus Group, there were seven new condo project launches in Vancouver during the first half of the quarter, with 664 units being brought to market. Compared to the entire second quarter, that’s one fewer project and only five fewer total condo units launched in half the time.
While that’s undoubtedly a bright spot for the new condo market, the fall outlook remains unclear.
“As market activity continues to pick up into the fall, more of the delayed launches from earlier in the year are likely to come to market, though much uncertainty related to the COVID-19 pandemic will continue to linger,” wrote Altus Group’s Wyse.
