OVERALL MARKET SUMMARY

In this Winter edition of the Fifth Dimension our data collection and analysis partner Zonda Urban chronicle the concluding quarter of 2022, the year to date totals and what to expect as Winter concludes and the Spring market arrives.

Q4 — New Home Market

Metro Vancouver’s new home market showed signs of recovery in the Fourth Quarter of 2022, as there was an increase in activity across several new project launches throughout the region. Although overall sales in the Fourth Quarter were significantly below the record-setting levels of 2021, stakeholders are anticipating an increase into 2023 as interest rates stabilize and more product becomes introduced to the market.

The 2,027 sales recorded in the Fourth Quarter were 74 percent lower than the same quarter last year but were 33 percent higher than the previous quarter. There were 8,199 released and unsold units at the end of the year, a two percent decrease from the previous quarter and a 40 percent increase from the same quarter last year. There were 970 move-in ready and unsold new multi-family homes available at the end of the Fourth Quarter, up 43 percent from the previous quarter and up 70 percent from the same quarter last year.

A total of 836 High Rise sales were recorded in the Fourth Quarter of 2022; a 31 percent increase from the previous quarter, but 80 percent fewer than the same quarter last year. High Rise sales accounted for 41 percent of new home sales during the quarter. There were 5,546 released and unsold High Rise units available at the end of the Fourth Quarter, a five percent decrease from the previous quarter but a 22 percent increase year-over-year. The majority of High Rise sales in the Fourth Quarter were in the Central Surrey/North Delta sub-market, which accounted for 36 percent of all High Rise sales. Combined High Rise sales in the

Central Surrey/North Delta, Burnaby/New Westminster, and Tri Cities submarkets accounted for 84 percent of sales in this sector, and 35 percent of all new multi-family home sales during the quarter.

Notable sales activity occurred at Gilmore Place – Tower 2 by Onni Group (Brentwood), Keltic’s O2 (Metrotown), Oasis by Concord Pacific (Brentwood), SOCO Two (Coquitlam),and Anthem’s Georgetown Two (Central Surrey).

The 943 Low Rise condominium sales recorded in the Fourth Quarter of 2022 were 38 percent higher than the previous quarter but were 58 percent fewer than in the same quarter last year. The increase in sales when compared to the previous quarter can be partially explained by an increase in units of this product type added to the market; ten new Low Rise projects were launched during the quarter, which added 1,049 units to the market. The 1,566 released and unsold Low Rise units at the end of the Fourth Quarter represent a five percent decrease from the previous quarter. 260 of the total Fourth Quarter Low Rise sales were in the TriCities sub-market.

Notable sales activity across Metro Vancouver’s Low Rise condominium sector was observed at Sol (Burquitlam), Florin by Allaire and The Circadian Group (Burquitlam), and First & Royal by Areva Living (New Westminster), Adera’s Pura (Surrey City Centre), Whitetail Homes’ Galilea (Surrey City Centre), and Highstreet Village by AB Wall (Abbotsford).

A total of 248 Townhome sales were recorded in the Fourth Quarter of 2022, which represents a 23 percent increase from the previous quarter but a 79 percent year-over-year decline. There were 1,087 released and unsold Townhome units at the end of the Fourth Quarter, which is four percent higher than the previous quarter and 109 percent higher than the same quarter last year. The available Townhome inventory continued to rise as sales activity for this product remained low and ten new Townhome projects representing a total of 332 units were launched in the Fourth Quarter.

Notable sales activity was observed at Parc Portofino by Dava (Bridgeport), and Headwater by Apcon Group (Guildford), Westhampton at Hampton Cove by Polygon (Ladner), Garcha’s Union (Willoughby), and AB Wall’s Highstreet Village (Abbotsford),

Q4 — Resale Market

The resale market in the Fourth Quarter of 2022 saw a significant decrease in activity compared to the previous quarter and the same quarter in the previous year. A total of 1,458 newer multi-family homes were resold, which is 19 percent lower than the previous quarter and 62 percent lower compared to the same quarter in 2021. The High Rise, Low Rise, and Townhome sectors saw a decrease in re-sales of 29, eight, and 15 percent, respectively, compared to the previous quarter and a decrease of 63, 58, and 65 percent, respectively, compared to the same quarter last year.

The decrease in re-sales can be attributed to the Bank of Canada’s efforts to combat inflationary pressures, which led to an increase in the overnight lending rate twice during the Fourth Quarter, bringing the rate up to 450 basis points. This higher borrowing rate has negatively impacted purchaser sentiment, leading to reduced home buying activity and an increased demand for rental housing. However, there is optimism on interest rates peaking in 2023 as BoC Governor Tim Macklem indicated a conditional short-term “pause” on further rate increases in his most recent address in January.

Despite the decrease in re-sales, there were positive developments in the new home market in the Fourth Quarter. Multiple projects were