Making sense of Vancouver’s luxury condo market
Luxury condo market may be losing some of its lustre
Joanne Lee-Young
The Province
The glut in Vancouver’s luxury condo market has been getting some attention as their counterparts in London, New York and Sydney have also been losing their lustre.
At the height of the condo frenzy, well-heeled buyers from around the world were snapping up condos in these cities, in part, so they could safely store their wealth. Their eagerness to pay top dollar spurred developers and financiers to plan for more and more of the same product.
Realtor Ian Watt has said that before sales and prices started trending downward in 2018, Vancouver resale condo prices rose an incredible 93 per cent in 36 months.
But by May 2019 the only Downtown Vancouver condos that were moving well, “if the price is right,” were the units priced under $900,000. In that category, 28 per cent of active listings were selling. For downtown condos in the $1.5-million-to-$2.5-million range, only nine per cent of active listings sold. Between $2.5 million and $5 million, just three per cent of those condos moved and for units over $5 million, only one out of 49 active listings sold.
“The luxury market is a long way from finding the bottom,” wrote Watt in an update.
In the presale category, projects have gone from instantly selling out to being cancelled after not being able to hit targets of just 50 per cent of their units sold.
Provincial and municipal taxes targeted at speculators and owners who keep vacant properties, as well as stricter federal mortgage requirements, have significantly dampened what had been an overheated and highly leveraged market.
Now, there is chatter by lawyers who say some owners have been looking for ways to get out of their presale contracts as values drop and they can’t meet financing requirements.
Despite all of these trends, there remains a seemingly alternate universe of luxury projects and high-end highrises that are still being built. These include Westbank’s plans for 10 towers at Oakridge Centre, of which units for the first two towers have been marketed with prices upwards of an eye-watering $4,000 per square foot.
In the West End and downtown of Vancouver there are a few fancy towers designed by “starchitects” that are in the works, including one by N.Y.-based Robert Stern that will have over 450 “luxury residences.” Vancouver-based Landa Global Properties is building that one and also another at 1818 Alberni St.
These billion-dollar projects generally have a planning-to-completion timeline of between five and 10 years before their sales are finalized and the units are move-in ready, and observers say these developers obviously have a feeling that there will, eventually, again be buyers for these projects.
In the meantime, there is also a growing debate going on about what it means to invest in and develop this kind of high-end commodity in many of the cities such as London, N.Y. and Sydney, according to urban planner Andy Yan.
“The world (and Vancouver) seems to be full of Dom Perignon housing, just as everyone else is just looking for a glass of clean water,” he said.
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