Condo demand trending down

Clouds are darkening the court of Canada's condo kingdom.

Greater Vancouver can lay claim to having the nation's strongest condominium market, with condos accounting for 60 per cent of all sales in the area, Re/Max said in a report released yesterday. But strong or not, demand for condos in the Vancouver area has been plunging, according to a separate report released yesterday by PricewaterhouseCoopers said.

Condo sales in Greater Vancouver fell by 33 per cent from the previous quarter, the PWC report said. Sales of low-rise condo units plummeted by almost 60 per cent to 620 units from 1,480 in the second quarter.

"The second-quarter low-rise sales figure was probably a reflection of pent-up demand in the southeast suburban markets that has now been met," PWC said. "Average asking prices for low-rise condos were down during the third quarter, as demand slowed."

The unsold inventory of highrise condos in Burnaby and New Westminster rose to 825 units at the end of September from 315 units in early July. "Sales in the downtown-west end area managed to keep pace with new product coming on the market during this period," PWC said.

Re/Max's report paints a far brighter picture of the Greater Vancouver condo market. In the first 10 months of the year, average prices for townhomes rose 14 per cent to $475,350. Average apartment prices for the same period climbed 11 per cent to $381,600, Re/Max said.

Year-to-date condo sales for the Vancouver area are up seven per cent to 20,221 units. Vancouver's strong market has attracted speculators, who now account for up to 50 per cent of sales in the downtown core, Re/Max said.

"The impact of speculation, especially in Canada's largest condominium markets has yet to be determined but concerns for the future are relevant," said Elton Ash, Re/Max regional executive vice-president of Western Canada.

"This is a major factor that could influence prices in years to come," he said.

The top end of the Vancouver market is especially robust, with 453 condos worth more than $1 million changing hands this year, compared with 303 in 2006. Vancouver's highest-price condo changed hands earlier this year for $18 million -- a 7,400-square-foot penthouse suite at the private residences at Hotel Georgia.

(prepared by Paul Luke/Vancouver Sun)