Vancouver “Condopocalypse” Forecast – “Vancouver housing analyst Frank Schliewinsky is predicting a near collapse in condo sales across most of Metro Vancouver this year, with sales falling by as much as 50 per cent from a depressed 2012.”

“Noted Vancouver housing analyst Frank Schliewinsky is predicting a near collapse in MLS condominium sales across most of Metro Vancouver this year, with sales falling by as much as 50 per cent from a depressed 2012.
“The Mayans were right, at least as far as the Vancouver condo market goes,” Schliewinsky, founder of Strategics, states in his latest Vancouver Condo Report. “Condopocalypse in 2013. MLS sales of apartment and townhouse condos could be down to 8,000 units in 2013.”
If true, this would be a near-50 per cent drop in condominium and townhouse sales across the region compared with a year ago.
In the highrise market, Schliewinsky forecasts sales could fall to just 2,650 units this year, down from 3,200 in 2012. He predicts highrise condo prices will fall a further 7 per cent in 2013 following a 3 per cent drop in 2012: “The overall price trend is now negative.”
The low-rise condo sector, which makes up the bulk of the resale market, will not perform any better, he warns.” …
“Eventually the market will hit bottom and right now it’s not clear where the bottom is. Further price drops will play a big role in slowing the downward sales trend. The average MLS price per low-rise unit in 2012 was $326,000; a 1 per cent decline from 2011. The average price per square foot was $368; down 2 per cent from 2011. So far, price reductions for low-rise condos haven’t been enough to stimulate demand and unless there’s a major shift over the next 12 months, another 3 per cent drop isn’t going to do much either. ”
Vancouver realtors agree. They are seeing downward pressure on condominium prices, with luxury unit prices down 20 per cent from 2012 and lower-priced units down 10 per cent to 15 per cent.”

– from “Condopocalypse” now forecast for Vancouver’, Western Investor, 30 Jan 2013 [hat-tip joey jo jo]

When a speculative bubble starts to deflate, demand is deterred not stimulated.
In a normal market, demand would increase as price drops would immediately represent better true value.
In a spec mania, people have been buying on the premise that prices are going to continue to rise. When prices start dropping, that premise disappears. So, counterintuitively, demand drops as prices fall.
Price drops beget price drops.
– vreaa

22 responses to “Vancouver “Condopocalypse” Forecast – “Vancouver housing analyst Frank Schliewinsky is predicting a near collapse in condo sales across most of Metro Vancouver this year, with sales falling by as much as 50 per cent from a depressed 2012.”

  1. Real Estate Tsunami

    When FRANK SCHLIEWINSKY is speaking, everyone should listen.

  2. You’re getting all “biblical” on me, vreaa.

    • “The report also noted that God, a prominent area deity and dispenser of justice, appointed upon Adam another seed in the stead of Abel, who was killed by Cain. And so did Adam beget Seth, and Seth begat Enos, and Enos begat Cainan, and Cainan begat Mahalaheel, and Mahalaheel begat Jared, and Jared begat Enoch, and Enoch begat Methusaleh, and Methusaleh begat Lamech, and Lamech begat Noah. And Noah begat Ham, Shem and Japeth.”
      http://www.theonion.com/articles/methushael-begets-lamech,872/

      • [NoteToEd: When it came to his HobbyBlog, the Pharaoh Ramses was an impossible stickler for concision – to his contributor Moses’ eternal consternation. Just between the two of us… Moses’ was actually quite disappointed when the Creator misinterpreted his request for “A MightyRod and StoneCojones”…]

      • god needs to stop flipping condos … http://tinyurl.com/7fesqum

  3. Ha ha…. you lot are all going to hell!

  4. “In a spec mania, people have been buying on the premise that prices are going to continue to rise. When prices start dropping, that premise disappears. So, counterintuitively, demand drops as prices fall.
    Price drops beget price drops.”

    They should teach that in school.

  5. Everything you need to know about the brick and mortar (or more aptly for Van – stucco and laminate) state of our housing stock. A sad day indeed.

    http://www.straight.com/news/349656/home-inspector-ed-witzke-retires-protest-shoddy-buildings

    • “What got me over and over again is where I saw so much horror out there, so much cover-up,” Witzke said. “It was like a crime scene. It was like going from one crime scene to another. People have been cheated and lied to.”

      • And speaking of CrimeScenes/’MarketForces’… DearReaders… your ThursdayMorningZen…

        [CBC] – Logo battle breaks out in Surrey, BC: Shirts saying ‘Better safe than Surrey’ claimed to infringe copyright and trademark

        …”The Surrey logo features a stylized building outline, with the tag line, “The future lives here.” Some of the company’s T-shirts feature what looks very much like the same stylized building, as well as bullet holes and the tag line “Better safe than Surrey.” Another shirt features a handgun with the words “Surrey, the future dies here.”…

        http://tinyurl.com/aaw7yjs

  6. when you got supply far outpacing demand, you are toast. and when condo prices drop, sfh prices will fall too. the game is up. one development i have been watching, prelude city homes, near oakridge, had 63% sold a few months ago, and now its down to 53%sold, according to their big sign. buyers are now backing out and only insiders are left holding the bag.

  7. I fear the worst may be happening for Van; sales falling in double digits (on top of last year’s double digits) contracting the absorption rate to extreme lows. Chart This will drive up inventory even faster then last year, so we may see 20k listings by March-April.

    One thing is certain: market forces have now overridden the willingness of buyers to step into this market.

  8. pricedoutfornow

    Who is this “noted housing analyst” and how come we haven’t heard from him before? Oh right….I’m guessing he’s not paid the big bucks by any real estate interest, therefore he doesn’t get any TV time. Typical.

  9. I have been watching this creation being built for the past year. It looks like a bunch of chicken coops plunked down beside the freeway while trying to hide into the hillside and be invisible … I am curious to see if these poorly built places will be selling or they are going to be an eyesore for future generations….

    can any one comment?

    “Information is sparse, but this huge master planned development of approximately 650 spacious Surrey Highcrest townhomes in a 15 acre site is coming soon to the Fraser Heights Surrey real estate market place! ”

    http://www.vancouver-real-estate-direct.com/buzz/2013/02/surrey-highcrest-townhomes/

  10. Real Estate Tsunami

    Talking about shoddy construction in Richmond.
    The lot beside me which is practically a pond (kids actually skated on it during a recent cold spell) has now been sold.
    Yesterday, they started framing the concrete foundation, with absolutely no preparation of the ground.
    They just pumped all the water out.
    This project will be under water soon.

    • “They just pumped all the water out.
      This project will be under water soon.”

      underwater huh? it was probally underwater before the ink was dry on the sales agreement…LOL

  11. Great site here! I’ve only been lurking for a couple of months, but already I’ve learned a lot about current real estate conditions.

    “Vancouver realtors agree. They are seeing downward pressure on condominium prices, with luxury unit prices down 20 per cent from 2012 and lower-priced units down 10 per cent to 15 per cent.”

    So if – and I’m assuming here – the analyst has talked to enough realtors to make that statement, then is this the year the bubble finally breaks?

    Insiders aren’t always right, but surely they must be pretty nervous about the whole situation to make such a confession.

  12. Seems like the rental prices are softening as well. 2-3 years ago I was looking for a 2 bdrm for 1600 or less downtown and it was like trying to find a unicorn. Now I’m seeing a lot more options.

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