We're missing part of the story about our real estate markets

Watchers of our Vancouver and provincial real estate data reports are missing part of the story, every month. When the Real Estate Board of Greater Vancouver (REBGV) and British Columbia Real Estate Association (BCREA) release data on how the market is performing, the monthly reports mainly look at sales volumes, listings figures and prices.

Did the number of deals increase month over month, and year over year? And are listings and prices going up, or are they going down? This data is clearly important and shows homeowners how their assets are performing while giving buyers a sense of market direction.

But these reports fail to review the regional and provincial pre-sale home figures. The pre-sale market tells the other part of the story, and that data shouldn’t be ignored when analyzing the health of our local market, and in turn, the health of our local economy.

Every month, our team at MLA Canada produces a monthly Pre-Sale Pulse Report. This report tells us the rest of the story. Our data looks at the number of projects and the number of units that are released for pre-sale. For instance, in September 2020, developers released six projects, bringing 583 units to the market. The month before, developers released nine projects for a total of 506 units. These projects were not exclusive to Vancouver, but rather across the Lower Mainland, ranging from West Vancouver to Port Coquitlam.

Meanwhile, in September, 35.8 per cent of newly released pre-sale inventory sold. This means September marked the highest monthly absorption rate over the previous 12 months. While part of the reason for a strong month of sales can be attributed to residual effects of pent-up demand from when the market was put on hold this past spring, the activity also speaks to the health of the market, which we saw in data released in mid-October from the BCREA.

As the BCREA report explained, the number of real estate sales in B.C. year-over-year in September increased 63 per cent. The average price of a home in B.C. increased by 15.3 per cent when compared to last year. And it’s this report, in addition to the report on the pre-sale market, that must be analyzed when studying our local market.

Buyers and sellers need the full story when making such important decisions, and having a full understanding of the pre-sale market is part of that story.