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The postponing of several condo-project launches in the first quarter of 2019 meant 75-per-cent fewer units were released for sale, compared with the previous quarter.

“Highrise condo projects, which carry significant risk for developers and construction lenders, comprised the largest proportion of postponed developments,” said Ferreira in a news release.

Photo by Gerry Kahrmann / PNG files

Projects that are more dependent on buyers who are investors have also been hit hard, as investors are “more apt to stay on the sidelines and wait for what they perceive as a bottom of the market.”

This impacted some findings for the quarter. For example, there was a more significant drop in sales in the area north of the Fraser River because of the greater concentration of highrise developments there.

To compare, while highrise condo sales fell by 61 per cent year-on-year, there was only a 28-per-cent drop for lowrise condo sales.

The Real Estate Development Marketing Act requires developers to secure construction financing nine months after they file a disclosure statement, which allows them to legally sell their units. When presales were selling like hotcakes, this timeline was easy to meet.

Now, “with such a short window in which to meet presale targets required to obtain financing, developers are reluctant to launch a new project without some certainty they’ll meet those targets,” said Ferreira.

He added that the “overwhelming majority of unsold units are in the pre-construction phase, with completed and unsold units accounting for just six per cent of all unsold inventory.”