As we head into April and the spring season starts to take off, the demand for condos in Vancouver is fast out-pacing the supply and the effect on prices is a little hard to believe. While the Real Estate Board of Greater Vancouver recorded a 28.8% decrease in condo apartment sales in February 2017 compared to 2016, our Condo Pros on the ground in the Metro Vancouver area say the condo market is still very busy.
Vancouver condo market is still hot
There simply isn’t enough inventory to meet the demand. A reluctance to sell among homeowners has placed a strain on the resale market, and new developments offer mostly one-bedroom and bachelor style micro-condos that are too small for families.
According to Condo Pro Scott Thompson, most of the good one-bedroom and two-bedroom inventory under the $1 million mark is selling well, often in multiple offer situations. There are a lot of people that want to buy right now, and not enough listings to go around. The last few deals that Condo Pro Anders Fung closed in Vancouver and Burnaby had 18 offers and 30 offers, respectively.
The high demand is spilling over into the pre-construction market, and some developers are cashing in with insane prices. A new development by Westbank in Coal Harbour will likely break some pricing records in Vancouver as the average price is going to be $2,000/sqf. That’s a studio apartment for around $1.2 million, according to the CBC.
Prices like this are absurd for the average Vancouverite. In a city where nearly 50% of the population makes less than $50,000 a year, these developers are taking advantage of the market. But they are simply selling to the highest bidder, and people are still buying the units.
Will government rules help the Vancouver condo market?
More government intervention seems on the way, as the City of Vancouver has recently conducted a study outlining housing needs based on personal and household income. The results are being used to encourage developers to design a percentage of units specifically for various income levels. The percentage requirement would be enforced similarly to the way Vancouver makes sure a certain percentage of new condo buildings provide market rental units. Cities like New York have similar strategies in place to ensure affordable housing.