Vancouver Housing Market Update: Condo Sales Chill Despite Construction Boom
Vancouver's condo market is sending mixed signals in February 2024. While condo apartment sales remain sluggish compared to pre-pandemic years, a record number of condos are under construction, raising concerns about a potential price correction. In January 2024, there were 54,368 condos under construction in Metro Vancouver.
Construction Boom Meets Condo Chill
The city is witnessing a surge in apartment construction, the highest in three years. This influx of new homes is creating an environment with a higher risk of price adjustments in the future.
On the condo front, purchase activity hasn’t yet gained momentum despite some improvement over 2023. Compared to the red-hot markets of 2021 and 2022, condo purchases remain subdued. This trend stands in stark contrast to cities like Calgary, which are experiencing a condo boom.
Shifting Power Dynamics
While Vancouver technically remains a seller's market due to inventory levels, buyers hold more negotiating power than usual. With condo inventory sitting at around four months' supply, this surpasses the ten-year average. This shift empowers buyers to negotiate better deals.
Prices on Thin Ice
Although condo prices have risen slightly this spring, experts predict a softening later in the year. The combination of rising condo supply and persistent high mortgage rates is likely to put downward pressure on prices.
Buyer's Market on the Horizon?
The pipeline of new homes and the sluggish condo sales suggest that 2024 could offer significant advantages to buyers. Traditionally, spring favours sellers, while late summer leans towards buyers. The current buyer-friendly market trend hints at the possibility of a price correction later this year, potentially around late summer.
