residential
ABSORBING THE SLOWDOWN IN DEMAND
Within the pre-sale segment of Metro Vancouver’s market in particular, much ado has been made recently about both realized and potential completed and unabsorbed condo inventory. To put a finer point on it, with projects not selling-out the way they had been during the two years leading up to mid-2017, rising inventory levels could add to the already-elevated stock of available resale homes—the concern being that this could exert additional downward pressure on prices and, by extension, threaten the financial viability of new projects. Indeed, the regional completed and unabsorbed condo inventory spiked in July 2018, averaging 680 homes monthly
since then, on the heels of a two-year period when the monthly average was 300 homes. But additional context is warranted, because inventories across the region were unsustainably low between 2016 and 2018: to wit, there was a monthly average of 1,730 completed and unabsorbed condos in Metro Vancouver in the immediate aftermath of the Financial Crisis through to 2016—2.5 times the current level. We do expect this number to go up in the short-term, but with the overall number of starts slowing, this completed and unabsorbed inventory is unlikely to reach the heights achieved during the 2010-2016 period.
VANCOUVER’S RECENT UPTICK IN COMPLETED & UNSOLD CONDOS ›
2,500
2,000
1,500
1,000
500
0
SOURCE: CANADA MORTGAGE & HOUSING CORPORATION
DATA: INVENTORY (STOCK)
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