MarketShare Q1 2013

First Quarter Surge in New Multifamily Sales Fails to Materialize

-- Colliers International’s residential real estate report indicated that First Quarter sales decreased by 45 percent compared to the same quarter in 2012, but projects improvement in Second Quarter --

May 16, 2013 – Colliers’ report on new multifamily home sales in Metropolitan Vancouver states that during the First Quarter of 2013, 2,033 new multifamily home sales were recorded. This figure represents a 3 percent decrease over the previous quarter in 2012 and a 45 percent reduction from the same quarter in 2013. “It is true that investment demand has been more moderate of late,” commented Scott Brown, Senior Vice President, Colliers’ residential group. “This moderation is, however, partly due to lack of supply as few new launches were conducted in markets investors tend to favour such as Vancouver Downtown and Burnaby.  Thus, the magnitude of the decrease this quarter compared to last year is somewhat misleading.”

Given that there were fewer significant project launches attracting investment in the First Quarter of 2013 and a number of these type of launches are scheduled for the Second Quarter, Colliers expects stronger Second Quarter performance. Brown projects that the 2013 half year sales figure will be within 10 to 15 percent of the half year figure in 2012.

While lower sales did impact inventory levels, the number of completed and unsold homes or standing inventory has remained largely unchanged over the past several quarters. This is good news for developers and lenders.  This is an indicator that end users, while not as active in the pre-sale markets, continue to represent sustainable demand for new housing.  “Even with some investor demand likely awaiting new offerings in key markets like Vancouver Downtown, there is evidence that the overall Metropolitan Vancouver market is shifting towards more of an end user-oriented one for the next while,” commented Brown.  

The report concludes with the view that the results of the provincial election, may positively impact the market for new multifamily homes in the short term.

A full copy of the report entitled MarketShare is available on request.
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