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.
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.
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.”