housing
BUILT BUT UNSOLD: A BELOW-AVERAGE PROBLEM
Though the stock of unabsorbed condos in Metro Vancouver has recently surged, a look at history provides some useful perspective.
Beginning in July 2018, the number of completed but unabsorbed (i.e. unsold) condos in Metro Vancouver jumped from 232 to 552. Since then, this stock of available homes has moved up as high as 815 homes in November 2018, though the most recent data show a drop to 645 in July. To be sure, this excess supply of new condos is greater than the average of 265 completed and unabsorbed homes that characterized this market between July 2016 and June 2018; however the inventory of unabsorbed condos moves in cycles, and indeed this market has endured extended periods of greater excess inventory than we are currently experiencing.
Between August 1990 and August 2001, the inventory of newly-built and unsold condos never dipped below 1,000, averaging 2,164 over that period (more than three times current levels). The same circumstances characterized the January 2010 to August 2015 period, with the region’s unsold condo inventory persistently exceeding 1,000 homes and averaging 1,807 (just under three times the current level). While in the current market some challenges certainly exist for purveyors of these homes, the headwinds are less fierce than in past cycles.
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