The unsold inventory includes a range of sizes, with larger, two- and three-bedroom units making up a significant share of what’s still on the market
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Thousands of new condos are sitting unsold across Metro Vancouver, leaving developers with about $4.4 billion worth of finished-but-vacant real estate, new research shows.
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And they aren’t all tiny condos often geared at investors. The unsold inventory includes a range of sizes, with larger, two- and three-bedroom units making up a significant share of what’s still on the market.
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“It’s actually not as weighted heavily towards the smaller units, as one may think,” said Darcy Rai, president of the Vancouver-based real estate analytics firm Real Property Data.
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For years, condo buildings started selling units before they were finished, and the smaller homes sold first, Rai said. “For the last decade, presales have cleared from the bottom of the price sheet up. What’s left standing today is the larger, higher-priced end of each project, where fewer buyers were willing to commit years ahead based on a floor plan.”
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Some have been sitting empty for years. More than 1,300 of the empty homes are in buildings that were completed at least two years ago, according to a report the firm released this month.
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Rai said that, in general, units that are priced at a premium are the ones that are left finished but unsold as buyers shift to more-affordable neighbourhoods where they can get more space at a lower price.
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“So, the stuff that’s left is the more expensive units,” he said,
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That dovetails with what Andy Yan, director of the City program at Simon Fraser University, has found, which is that more than 80 per cent of the unsold units are priced over $1 million.
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Zonda Urban, another Vancouver-based real estate analytics firm, counted just over 5,300 finished-but-unsold condos and townhomes across Metro as of Monday, including 1,200 in Burnaby, 958 in Vancouver, 816 in Richmond, 559 in Surrey and 543 in the Coquitlam-Port Moody region.
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Jon Bennest, vice-president of product development, agreed that most of the unsold inventory skews toward larger, more-expensive units.
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However, he said no amount of tinkering with unit mixes would’ve spared homebuilders launching new highrises a few years ago, at the peak of the market, from today’s challenges.
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“There was not really a unit mix you could design that would be an elixir for today’s market conditions,” he said.
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A large share of these unsold units are in highrise towers built near transit-oriented corridors, Bennest said.
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In Burnaby and Coquitlam-Port Moody, more highrise towers have been released over the past eight years, as development has grown in transit-oriented areas like Brentwood, Lougheed, Metrotown, Edmonds and Burquitlam, Bennest said.
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In Richmond, there have been several large concrete condo projects near the Canada Line and, more specifically, the Capstan Station, which have also resulted in a lot of unsold units in the area, he added.
