Condo inventories rose sharply in last six months

Condo inventories rose sharply in last six months

Vancouver Sun
Published: Thursday, January 25, 2007

Greater Vancouver real estate markets saw a 55 per cent increase in inventory of unsold presale condominium units over the last six months, which may trigger a slowdown in future development, PricewaterhouseCoopers reported today.
The rising inventory is likely a result of fewer buyers being able to afford Vancouver's high-flying prices, Craig Hennigar, vice-president of PricewaterhouseCoopers Real Estate (PsC), said.

However, Hennigar said developers will likely build the projects they have in the works now, then scale back their future expectations rather than drop prices that are being driven largely by skyrocketing land and construction costs.
Hennigar, in PwC's latest Greater Vancouver condominium market review, counted 4,350 unsold condominium units in pre-sale marketing at the end of December, compared with 2,780 in January, 2006.

However, Hennigar added that the 4,350 unsold units only represented about 28 per cent of all units in pre-sale marketing. In January, the 2,780 units represented 23 per cent, so the ratio of unsold units in the market hasn't increased dramatically.

"We're not suggesting, at this point, that the market is awash in unsold presales," Hennigar said. "We're not even at 50 per cent [which would signal a buyer's market]. But we're closer to it than we were six months ago, or 12 months ago when the market was hotter."