Vancouver’s existing-home market has been battered by provincial policy interventions, mortgage rules, and rising interest rates.

Now, it faces another potential threat — new condos.

“A swath of new condos looking to complete in the next year is an upside risk to inventory,” writes Central 1 Deputy Chief Economist Bryan Yu in a briefing.

The possible issue, as Yu suggests, is that while activity in Vancouver’s detached market is hovering near levels not seen since the 2008–2009 financial crisis, the multi-family segment has fared better, softening the blow to the market overall — but that may soon change.

“While sales have plunged, the market continues to be supported by modest levels of resale inventory,” says Yu.

The sales-to-active listings ratio is at a seasonally adjusted 18%, which would typically indicate a balanced market. However, when only looking at the detached segment, the ratio drops to 12%, suggestive of a seller’s market.

“That said, this is being propped up by stronger conditions in the apartment and townhome sector with ratios near 25%,” Yu explains.

The multi-family market has been aided by a strong economy and the fact that for many in Vancouver, these types of properties are the last affordable option.

The benchmark price of a Greater Vancouver detached home was $1,561,000 last month, compared to $695,500 in the condo segment, according to the Real Estate Board of Greater Vancouver.

It remains to be seen whether the market could absorb an increase in listings on the multi-family side, and Yu provides specific insight into why inventory may very well rise further.

“Completions may trigger [an] increase in resale listings of existing homes and sales by pre-sale investors,” says Yu.

How New Condos Could Be A Risk to Vancouver’s Recession-Like Housing Downturn by Josh Sherman | Livabl