Pre Sale Condo Prices Soaring per Urban Analytics

In a recent presentation held by UDI (Urban Development Institute), Michael Ferreira, the head of Urban Analytics, presented some insights on the pre sale condo market in Vancouver.

Ferreira helps analyze market conditions for developers of large scale projects. With 20 years of insights on the market he’s seen a thing or two, but perhaps nothing like this…

In his latest quarterly report he says:

“Some developers are  taking  full advantage of  the  supply/demand  imbalance and  are  seeking  to  maximize  the  achievable  sale  values  for  their  projects by far exceeding previous highs attained in some sub markets. However, it is becoming  increasingly challenging to rationalize the substantially higher prices being sought in a number  of areas  of  the  region, particularly  for market‐watchers who  recall  the end  result  of  previous  market  cycles  where  rapid price  escalation  in  short  time  spans  were  experienced.”

Metrotown Pre Sale Prices Jump 57%

From his presentation his analysis shows pre sale prices have soared the most in Metrotown, jumping from an average of $700 in 2015 to $1100 per square foot today. Ironically, Metrotown also has the most new construction underway.

Metrotown pre sale condo prices
Pre Sale Condo Prices from 2015-2017

He also highlights one recent project in the Metrotown area called ‘The Met 2’ which sold as a pre sale back in early 2014 for an average price of $595/SqFt. Re-sales today on the completed building are now going for $1100 per square foot. Just a year ago assignments were selling at $800/SqFt.

The Met 2 prices
The Met 2 rises 82% in value since 2014.

A mind blowing 82% increase since it was pre sold back in early 2014…

Ferreira had this to say about recent buyer trends:

“Not surprising, the recent rapid price escalation for new multi‐family product in many of Metro  Vancouver’s urban sub‐markets is driving more prospective buyers to consider product in more  suburban areas. The  substantial  price increases being experienced in  some  sectors and areas  are  also  attracting  a  greater number  of  speculative  investors  whose  primary  motivation  to  purchase is short‐term price appreciation. Should the prevalence of this buyer group continue to increase, the sustainability of current market conditions could become more tenuous.”

No kidding…