Prices for new high-rise condos have fallen from the recent peak in spring 2011 as average suite sizes have shrunk, according to market research firm Strategics.
In 2013, sales of newly built high-rise condominiums were close to 6,600 units across Metro Vancouver in 2013, up from 4,400 in 2011 and putting a lie to fears of a glut forming in the market. About 20% of all sales were in three Vancouver projects by Wall Financial, Concord Pacific and Polygon, said Strategics president Frank Schliewinsky.
But prices for high-rise condos have continued to track downwards for the past three years, for two reasons: more high-rise construction in the suburbs and smaller unit sizes. The average selling price at the end of 2013 was $585,000, down from $610,000 in 2011. The average price-per-square foot has remained fairly constant at close to $600. Since 2011, the average size of a high-rise condo unit has reduced from 880 square feet to 840 square feet.
In downtown Vancouver, the average new high-rise condo sold last year for $845,000. Downtown also accounted for the most high-rise condo starts in the region in 2013, with 1,400 units being marketed by year-end.
The second-most active market was North Surrey’s Guildford area, where just over 1,000 new high-rise condos came to the market in 2013. Here the average price is $304,000, or $458 per square. At the end of 2013, 53% of these units had sold, mostly to investors and immigrant buyers after an average of eight months of marketing, Schliewinsky said.
“It is no big secret that Chinese buyers and investors prefer new high-rise condos over wood frame, low-rise product,” Schliewinsky said. The result, he added, is a slump in the low-rise market, where sales have fallen from 3,340 units in 2011 to 2,300 in 2013. Strategics estimates that more than 3,500 new low-rise condominiums remained unsold at the end of last year.
The persistently high inventory of unsold units and flat sales have meant fewer new low-rise products being started. However, the price of low-rise units has increased from $328,000 in 2011 to $340,000 in 2013, and the average price-per-square-foot has increased from $404 to $418, mainly due to sales in higher-priced markets such as South Surrey and North Vancouver.
Meanwhile, the average asking price for a new townhouse has barely budged since 2011, when it was $428,000 or $287 per square foot. At the end of 2013, the average new townhouse was selling for $442,000, or $294 per-square- foot. Yet there are pockets of strong sales. Polygon sold 80% of a 46-unit Delta project in just four months last year and the one townhouse project that started last year in East Vancouver sold out in six months. In Surrey’s Newton area, however, six townhouse projects started marketing a total of 184 townhomes last year: after eight months, in December 2013, only 36% of the units have sold, Strategics noted.
