MARCH 2024 PRESALE REPORT: A WAVE OF ANTICIPATED PRESALE LAUNCHES

by Vishav Brar

“In line with the resale market, the volume of new presale supply increased month-over-month, matching typical seasonality. On our active sites, foot traffic and deal activity are generally increasing, giving us confidence going into the Spring. We anticipate new project launches to double from February to March and give us an indication of market breadth for the remainder of 2024.” - Garde MacDonald, Director of Advisory

In February, there was a surpassing of expectations as strong absorptions within the same month were observed.

In February, six presale programs were initiated, introducing a total of 590 residences to the market and achieving a 42.2% absorption rate within the same month. Particularly noteworthy was the launch of Juno, marking the debut of Surrey's first concrete tower of the year. Following weeks of early previews, Juno entered the market with 50% of its inventory already sold, demonstrating robust initial sales.

Similarly, the Partington Creek development on Burke Mountain commenced sales between late January and early February. Its initial release introduced 24 residences to the market, many of which are listed on the MLS. To stimulate sales with compelling messaging, the initial pricing strategy for these residences averaged $700 per square foot. Despite their spaciousness at approximately 2,000 square feet, this pricing strategy positions the project competitively within the market, offering compelling value compared to other available options for prospective homebuyers.

In 2023, the Okanagan real estate market underwent a period of adjustment characterized by dynamic shifts influenced by broader economic factors. Over the course of the year, 13 new projects initiated presales, introducing 1,319 units to the market. Of these, 43% were absorbed, resulting in 565 sales, indicating a positive market response. The majority of these projects were concentrated in the Central Okanagan, particularly in downtown cores and surrounding areas. Wood frame constructions were prevalent among these launches, catering to buyers seeking entry-level pricing or investment opportunities. However, investor sentiment experienced a slight shift following the Provincial Government's announcement of new short-term rental legislation in October.

Resale activity in the Central Okanagan, notably Kelowna, saw a decline, with total resales decreasing by 27% compared to 2022 and by 50% compared to 2021. This decline was influenced by rising interest rates and changes in work-from-home policies. Despite these challenges and the impact of significant wildfires, the market demonstrated resilience, supported by the region's high quality of life and growing population.

The impending short-term rental restrictions, effective May 2024, aim to address housing supply and affordability issues but present challenges for the tourism industry and the broader community. As the market prepares for potential shifts in interest rates and policy impacts in 2024, the Okanagan real estate sector finds itself at a critical juncture, navigating both opportunities and obstacles to sustain its attractiveness and vitality.

MARCH MADNESS BRINGS WAVE OF NEW LAUNCHES

The Spring season typically heralds the peak activity in the real estate sector, and it appears that 2024 will follow suit. It is anticipated that 14 presale programs will debut in March, introducing a potential 2,150 units to the market. Unsurprisingly, a majority of these residences will be concrete condominiums, with significant launches including Reign by Wesgroup's north tower, Ethos by Anthem, and Bosa's Parkway 2 in Surrey.

Amidst fierce competition within the market, developers are seeking ways to distinguish themselves by crafting unique narratives and innovative launch promotions. A noteworthy example is Reign's "Ticket to the Top" campaign, a clever homage to Willy Wonka's golden ticket. Prospective buyers purchasing on lower floors have the chance to win an upgrade to the penthouse of their chosen bedroom type. Such incentives generate excitement and leave a lasting impression.

Overall, developer sentiment remains cautious. The current market environment is rife with uncertainties and lacks sufficient guarantees. Attention is primarily focused on the latter half of the year, when anticipated declines in interest rates are expected to reinvigorate sales activity, driven by pent-up demand.

MARCH 2024 PRESALE REPORT: A WAVE OF ANTICIPATED PRESALE LAUNCHES

by Vishav Brar

MARCH MADNESS BRINGS WAVE OF NEW LAUNCHES

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