Vancouver presale Condo prices fall below 2022 values

[JOE]

The mighty Vancouver Real Estate Market once a pillar of the local economy, is beginning to show some cracks:


https://maplenewswire.ca/over-half-of-metro-vancouver-presale-condos-now-valued-below-original-price/feature/

Presale Condo Values Dip, Leaving Buyers Facing Tough Choices

Thousands of Metro Vancouver presale condo buyers who signed contracts in 2022 and 2023 are now confronting a harsh reality: their units are worth less than the prices they initially agreed to pay. More than half of the mortgage-required appraisals are coming in below the original sale prices, forcing buyers to either pay the difference out of pocket or seek refinancing to complete their purchases.

Mortgage Lenders Tighten Financing as Appraisals Drop

With appraised values falling between 5% and 20% below contract prices, lenders are offering smaller mortgages. This shift means buyers must cover the shortfall themselves, putting financial strain on many. Adam Lawrenson, a Vancouver appraiser working closely with banks and mortgage brokers, warns that the long-held belief that presale condo prices always rise no longer holds true.
Market Glut Spurs Immediate Resales, Driving Prices Lower

The drop in value has prompted an uptick in buyers listing their new or nearly new units for sale immediately after closing. This surge in supply, combined with weaker demand, is pushing prices down further. Buyers can often find newer units on the resale market at lower prices than their presale contracts, reinforcing the downward pressure on appraisals.

Certain Areas and Buildings Hit Hardest by Price Corrections

No part of the Lower Mainland is immune, but some neighborhoods and developments are more affected. Langley, for example, has seen overbuilding with units sitting vacant for months. North Burnaby has multiple buildings with numerous one-bedroom units flooding the market. Even luxury presales in downtown Vancouver have seen appraisals drop by $300,000 to $500,000 from their original prices.

Investor Participation Declines Sharply Amid Market Shifts

Research from Rennie Intelligence shows investor involvement in presales has dropped from about 50% in 2021-23 to just 7% in early 2025. This decline contributes to slower absorption of new units, with nearly 4,840 condos either completed and unsold or nearing completion across Metro Vancouver.

Outlook: Absorption Rates Key to Market Recovery

While some absorption of units is expected through 2025, uncertainties around the economy and geopolitical factors may slow sales further. Rennie's head economist Ryan Berlin cautions that current projections assume steady sales rates, which may not materialize given the challenging market conditions.