BCBusiness
Amid an unprecedented housing crisis, presales have tanked and unsold condos are stacking up. As residential building stalls and the province and feds are unwilling to commit to the support the industry is asking for, how can we save development before it’s an all-out catastrophe?
It wasn’t that long ago that when a presale office opened for a new high-rise condo tower in Metro Vancouver, there’d be a lineup down the street of eager buyers jockeying to put down a deposit. But economic uncertainty from U.S. tariffs, interest rates, surplus supply, skyrocketing material and labour costs, rising municipal fees, and a crackdown on investor capital have dramatically changed all that.
Not only are the lineups gone, so are most of the other buyers too.
“If you’re looking at a condo for a potential investment you might be underwater cash flow wise if you are carrying a mortgage on it,” said Brendon Ogmundson, chief economist at the BC Real Estate Association. “Rents were rising but are now falling, so maybe you’re not going to get the rent you expected or need on an investment. And price appreciation is not there.”
“It’s all kind of stacked up to create an insurmountable wall for the industry to now get over, or through,” added Greg Zayadi, president of Rennie group.
Rennie, the region’s leading condo-marketing group, made waves in May by laying off 31 people, or one-quarter of its staff. Wesgroup Properties followed suit in June, cutting 12 per cent of its workforce. “Over the last eight months we’ve seen a number of companies cutting staff—only two have been public,” said Zayadi. Rennie wanted to be upfront about the challenges, he added. “If nobody talks about the reality, nobody understands how big a problem it is.”
Residential condo towers typically require the presale of 60 to 70 per cent of units in order to obtain financing for construction. Anne McMullin, president of the Urban Development Institute, said the vast majority of projects that have launched or gone to market are not getting near to that. “The issue is the cost of building homes is now more expensive than what 80 per cent of the population can afford,” she said.
Metro Vancouver saw 1,472 pre-sales for high-rise concrete condos in the first two quarters of 2025, said Stefan Greiner, vice-president of Zonda Urban, the major pre-sale tracking firm. At that rate, the region is on track for a 20 per cent decline in high-rise concrete pre-sales from 2024, and 53 per cent from 2023. Only one concrete high-rise project launched in the second quarter. The region is on track for a 33 per cent decline in all presales (wood and concrete buildings) this year from last. And presales overall are down 50 per cent compared to longer-term historical averages. “That’s a big collapse,” said Greiner.
As a result, residential construction has stalled. More than 22 per cent of land sales over $5 million in the first quarter of 2025 were court-ordered — double the same period last year, according to the UDI. The region’s unsold condo inventory is expected to increase by more than 60 per cent this year, estimated the institute.
Of the 16,589 presale units on the market in the second quarter of 2025, more than 61 per cent are in the “danger zone” where project pre-sales lag far behind 70 per cent targets, said Greiner.
Some developers are cancelling projects, while others are converting mid-stream to rentals. The 60-storey CURV luxury project in the West End of Vancouver, from Brivia Group, appears to be teetering into insolvency. Tangerine Developments flipped a 379-unit condo plan into rentals in Surrey last month. Wesgroup converted a 294-condo tower in New Westminster into rental in 2024, using a $135 million loan from Canada Mortgage and Housing Corporation.
The economic impact of a residential construction slowdown could be immense. There’s more than $2.2 billion in property transfer tax revenue from real estate transactions at risk for the provincial government, during a record deficit year. It had budgeted an average 5.5 per annual growth in transfer tax revenue. That’s not happening. Nor is a budgeted jump in housing starts.
Roughly 10 per cent of B.C.’s GDP is linked to its 250,000 construction jobs, half of which are in residential housing, said Chris Gardiner, president of the Independent Contractors and Business Association. When developers pause or cancel projects, it ripples through the various companies that do mechanical, electrical, HVAC, drywall, civil contracting, rebar, marketing, architecture, engineering and more. “Contractors have started to lay people off in numbers we haven’t seen in a decade,” said Gardiner. “I think 2026 is going to be a year where you’ll see more of that.”
The development industry has long argued the numerous municipal fees, red tape and micromanagement by local planners were unsustainable. When projects were still profitable, it was a nuisance. Now, it’s a crisis. “This is just years of bad policy and fees layered on,” said Matthew McClenaghan, president of EDGAR Development. “There’s one development we’re looking to build, townhouses, and it’s $60,000 per door to pay for infrastructure.” Forcing the cost of water, sewer and road infrastructure onto new housing construction is unsustainable, say developers, when the math to buy or rent a unit already doesn’t work.
Amid an unprecedented housing crisis in the province, they are calling on the BC NDP government to help municipalities fund infrastructure.The province is grandfathering Metro Vancouver residential projects that started before March 2024 , backstopped by $250 million in federal cash. The hope is to salvage projects stuck mid-stream. The government also doubled timelines for developers to pay development and amenity cost charges, to save interest. And it has cut the cost of electrical hookups from BC Hydro. “We’re trying to meet industry where it’s at now, where the market is at now,” said Ravi Kahlon, who was housing minister at the time of this interview but has since been shuffled to the jobs ministry. “We’re trying to find innovative solutions.” The province does not intend to scrap its speculation tax, short-term rental restrictions, anti-flipping tax or foreign buyers’ tax, said Kahlon. Developers say all of those are making it harder to attract capital.
Opposition Conservative housing critic Linda Hepner said the government should repeal building step code changes, which add huge new costs to buildings to achieve net-zero emissions by 2030 and be carbon neutral by 2032. Ottawa should also repeal the foreign buyers ban on residential real estate, and B.C. should waive the property transfer tax on all new home developments for at least two years, said Hepner.
B.C. could also consider measures adopted in other regions. In Australia, the government created a revolving $1 billion fund to act as guarantor for up to 50 per cent of presales on housing projects. Developers have to start building within six months, and the government can buy any unsold units at a discounted rate for social housing.
B.C. isn’t interested in those kinds of measures. But Premier David Eby has said he’s willing to explore an investor model for purpose-built rental units, letting people buy in to finance the project for a return, without the hassle of being the landlord.
Public money for pre-sales is a contentious idea not all developers support, because real estate development is too high risk for taxpayer funds. The focus should be on reducing government-imposed costs, they say. But it could also involve an attitude shift, to treat real estate like a wanted part of the provincial economy—like Ontario’s auto sector, where the province and federal governments provided upwards of $13 billion for bail outs when the industry was in economic turmoil.
“There’s a number of industries that get a heck of a lot of government support,” said Zayadi. “Look at the film industry for example, the amount of tax credits, government support and other things they get when honestly the industry is quite successful on its own. Whereas we are the exact opposite. We get punished. It’s what more can we impose on you.”
At Anthem Properties, founder and CEO Eric Carlson said he’s pivoting some of his firm’s 853 employees from residential high-rises to other work in land development, warehousing, shopping centres and income properties, as well as shifting homebuilding away from the Vancouver area to cities like Calgary, where costs are lower and Anthem sold a record number of homes last year. Carlson said Anthem will carry underperforming residential projects a little longer if it means retaining talent for the long haul.
“People aren’t commodities,” he said. “To grow a good sales manager takes 10 years. And so for the sake of one slow year, or even 18 months of slowness, I’m not going to give that person up. It’s a bad deal.”
The industry has justifiable complaints about incoherent government housing policies, Carlson added. “Public policy has been a nightmare for years, and it’s played a role in where we are at.”
The consequence of today’s high-rise condo slowdown will be felt in a few years. “There is going to be an aspect of supply that is going to dry up over the next two years plus,” said Zayadi at Rennie group. “We start to see it evaporate in 2027. As we move through it there’s going to be no new homes being built and delivered.”
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