Latest news with #AnneMcMullin
Yahoo
08-07-2025
- Business
- Yahoo
Metro Vancouver's condo market is slumping. Here are 4 key factors behind the slowdown
After years of soaring prices and new builds, Metro Vancouver's condo market is showing signs of strain with projects stalling, sales declining, and developers hitting pause. Industry experts say it's the result of a "perfect storm" of four major forces converging: high interest rates and softening rental income, reduced foreign capital and lower immigration — all of which have created a challenging environment for both buyers and builders. "[We] are at a breaking point, the industry is doing terribly," said Anne McMullin, CEO of the Urban Development Institute. "It's not just that the industry is struggling; it's our inability to deliver homes that people can afford." Increase in borrowing costs has reduced affordability for buyers and made it more expensive for developers to finance new builds, says McMullin. Just five years ago, mortgage rates were near historic lows, making it relatively affordable for buyers to borrow large sums and invest in real estate. But those rates have climbed significantly, pushing up monthly mortgage payments. WATCH | Some real estate advisors question Surrey's decision to convert condos to rental units: The result is higher "carrying costs" — the total expense of owning a condo, including mortgage payments, property taxes and maintenance fees. The City of Vancouver's 2025 budget includes a 3.9 per cent property tax increase and an 18.2 per cent hike in utility fees, together adding hundreds of dollars to annual expenses. "It costs more to build a unit or a home than the average person in the Lower Mainland can afford," said McMullin. "When it's costing more to build … we see project cancellations and we start to see projects not going ahead." At the same time, condo and rental price growth has stagnated, which means homeowners can no longer count on steady price growth to absorb the costs. According to the latest housing market update from the B.C. Real Estate Association, residential prices in the province in May 2025 were down 4.2 per cent at $959,058 compared to the same time last year, while residential sales were down 13.5 per cent. In Vancouver, average asking rents for a two-bedroom fell from $3,440 in 2024 to $3,170 in 2025, according to the latest figures from Statistics Canada. Though economists expect rates to begin to decline slightly in the second half of the year, persistent inflation risks and ongoing U.S. trade tensions could keep borrowing costs elevated for now. A second factor cooling B.C.'s condo market is the decline in foreign investment, largely due to the federal ban on non-residents purchasing residential property in Canada. Initially enacted in January 2023 under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, the ban was recently extended by two more years and is now set to expire on Jan. 1, 2027. It prohibits foreign commercial enterprises and non-resident individuals from buying homes anywhere in Canada. The federal government says foreign ownership has fuelled worries about Canadians being priced out of housing markets in cities and towns across the country. But for developers, the measure has made it harder to access the capital needed to get projects off the ground. "While the intention is understandable, the current broad-brush form of the ban also limits access to foreign capital that could help builders meet presale thresholds and finance new construction," the Homebuilders Association Vancouver said in a statement. The association has called for a more flexible approach to the policy. The group suggests Canada could look to Australia's model, which allows foreign buyers to invest in new builds under specific conditions, such as requiring the units to be rented out or limiting resale timelines. Another drag on demand is a recent slowdown in population growth. WATCH | Metro Vancouver housing market looking good for buyers: analyst: As of spring 2025, B.C.'s population stood at approximately 5.7 million. But the province recorded a net population decline, with 2,357 fewer residents compared to the previous quarter. The drop comes amid changes in federal immigration policy. Under its 2025–2027 Immigration Levels Plan, the federal government has introduced targets not only for permanent residents but also for temporary residents, which include international students and foreign workers. The plan aims to reduce temporary resident volumes to no more than five per cent of Canada's total population by the end of 2026. The Canadian Mortgage and Housing Corporation says the condo slowdown is likely to persist this year as supply increases outpace demand.
CBC
02-07-2025
- Business
- CBC
B.C. is easing rules on upfront costs for homebuilders to spur project construction
The British Columbia government is loosening the rules for payment of development fees in a bid to jump-start home construction that has been hampered by upfront costs. Housing Minister Ravi Kahlon says among the biggest changes will be more flexible and extended payment timelines for homebuilders, so instead of paying development fees up front, they will pay 25 per cent at permit approval and 75 per cent when the building is occupied. Developers will also have four years, rather than two, to pay the charges, in rule changes that Kahlon says are needed because the current market conditions have stalled projects in the province. While some municipalities want letters of credit from a bank as a promise the work will be done, that can restrict a developer's access to credit, so the government will also change the regulations provincewide to allow for the financial guarantee of on-demand surety bonds. Kahlon says the rule changes could mean the difference between some housing projects moving ahead or not happening at all, due to high construction costs and interest rates that create a financial burden for builders. Anne McMullin, president of the Urban Development Institute, says the requirement to pay development fees upfront has become increasingly onerous for builders, especially as fees rise and access to capital tightens. "By shifting payment to occupancy, the provincial government is enabling more projects to move forward," she told a news conference on Wednesday. In June, Vancouver-based Wesgroup Properties president Beau Jarvis said in a post on social media that the company had to lay off employees in what was a reflection of the broader realities facing the industry, with housing projects across the country being cancelled or delayed because they are no longer viable. Jarvis said they were also delivering homes that people couldn't afford to purchase. "I will say it again — This is a cost-of-delivery crisis," he said on LinkedIn. Kahlon said those were exactly the type of concerns for homebuilding that the B.C. government is trying to address. "It means housing will be built faster and cheaper in our communities," Kahlon said. "And these kind of solutions sound maybe not as grand, but they are significant in the sense that they will make the difference between projects happening and projects not happening."
CBC
27-06-2025
- Business
- CBC
Metro Vancouver's condo market is slumping. Here are 4 key factors behind the slowdown
4 factors behind B.C.'s depressed condo market 17 hours ago Duration 2:58 Social Sharing After years of soaring prices and new builds, Metro Vancouver's condo market is showing signs of strain with projects stalling, sales declining, and developers hitting pause. Industry experts say it's the result of a "perfect storm" of four major forces converging: high interest rates and softening rental income, reduced foreign capital and lower immigration — all of which have created a challenging environment for both buyers and builders. "[We] are at a breaking point, the industry is doing terribly," said Anne McMullin, CEO of the Urban Development Institute. "It's not just that the industry is struggling; it's our inability to deliver homes that people can afford." Rising interest rates, declining rent Increase in borrowing costs has reduced affordability for buyers and made it more expensive for developers to finance new builds, says McMullin. Just five years ago, mortgage rates were near historic lows, making it relatively affordable for buyers to borrow large sums and invest in real estate. But those rates have climbed significantly, pushing up monthly mortgage payments. WATCH | Some real estate advisors question Surrey's decision to convert condos to rental units: Some real estate advisers question Surrey's decision to convert condos to rental units 3 days ago Duration 1:36 Surrey city council has approved changes to development applications for converting hundreds of condo units into rental units. As Pinki Wong reports, some real estate advisers think the shift will mean fewer homes for younger generations to purchase down the road. The result is higher "carrying costs" — the total expense of owning a condo, including mortgage payments, property taxes and maintenance fees. The City of Vancouver's 2025 budget includes a 3.9 per cent property tax increase and an 18.2 per cent hike in utility fees, together adding hundreds of dollars to annual expenses. "It costs more to build a unit or a home than the average person in the Lower Mainland can afford," said McMullin. "When it's costing more to build … we see project cancellations and we start to see projects not going ahead." At the same time, condo and rental price growth has stagnated, which means homeowners can no longer count on steady price growth to absorb the costs. According to the latest housing market update from the B.C. Real Estate Association, residential prices in the province in May 2025 were down 4.2 per cent at $959,058 compared to the same time last year, while residential sales were down 13.5 per cent. In Vancouver, average asking rents for a two-bedroom fell from $3,440 in 2024 to $3,170 in 2025, according to the latest figures from Statistics Canada. Though economists expect rates to begin to decline slightly in the second half of the year, persistent inflation risks and ongoing U.S. trade tensions could keep borrowing costs elevated for now. Decline in foreign capital and immigration levels A second factor cooling B.C.'s condo market is the decline in foreign investment, largely due to the federal ban on non-residents purchasing residential property in Canada. Initially enacted in January 2023 under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, the ban was recently extended by two more years and is now set to expire on Jan. 1, 2027. It prohibits foreign commercial enterprises and non-resident individuals from buying homes anywhere in Canada. The federal government says foreign ownership has fuelled worries about Canadians being priced out of housing markets in cities and towns across the country. But for developers, the measure has made it harder to access the capital needed to get projects off the ground. "While the intention is understandable, the current broad-brush form of the ban also limits access to foreign capital that could help builders meet presale thresholds and finance new construction," the Homebuilders Association Vancouver said in a statement. The association has called for a more flexible approach to the policy. The group suggests Canada could look to Australia's model, which allows foreign buyers to invest in new builds under specific conditions, such as requiring the units to be rented out or limiting resale timelines. Another drag on demand is a recent slowdown in population growth. WATCH | Metro Vancouver housing market looking good for buyers: analyst: Metro Vancouver housing market looking good for buyers: analyst 19 days ago Duration 7:46 A recent advertisement from a Surrey real estate agent which touted a 25 per cent discount on a housing unit highlights how buyers have an advantage in the current Metro Vancouver housing market. Mark Ting, a partner with Foundation Wealth and On The Coast's personal finance columnist, says that the trend of housing prices going down may be sustained. As of spring 2025, B.C.'s population stood at approximately 5.7 million. But the province recorded a net population decline, with 2,357 fewer residents compared to the previous quarter. The drop comes amid changes in federal immigration policy. Under its 2025–2027 Immigration Levels Plan, the federal government has introduced targets not only for permanent residents but also for temporary residents, which include international students and foreign workers. The plan aims to reduce temporary resident volumes to no more than five per cent of Canada's total population by the end of 2026. The Canadian Mortgage and Housing Corporation says the condo slowdown is likely to persist this year as supply increases outpace demand.
Vancouver Sun
03-06-2025
- Business
- Vancouver Sun
Vancouver seeks a new way of requiring infrastructure upgrades from developers
City of Vancouver staff are proposing developers help pay for the cost of building and maintaining municipal infrastructure as a condition of receiving a development permit, rather than earlier during the rezoning process. It's a response to the province's passing legislation in 2024 to build more housing by, among other actions, reducing the often-long and costly process of rezoning a site. The proposal, which comes to Vancouver city council on Tuesday, is to send a set of bylaw changes to public hearing for further consideration. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. Negotiations around what a developer provides to pay for sewers, drainage, water, solid waste, transportation and public areas serving its site have traditionally been part of the rezoning, which can take years. After this, a developer applies for a development permit. The intent of the change is to levy developers for that municipal infrastructure in a more formula-based way, to avoid drawn-out negotiations, when a development permit is being considered. 'Under Bill 16, conditions are supposed to be more transparent and predictable. Ideally, this means for the most part there should be much more standardization and not long negotiations,' said Anne McMullin, president of the Urban Development Institute, which represents the real estate and building industry. 'A key shift is that the city will now have the ability to secure public amenities, facilities, utilities and land at the development permit stage rather than through the rezoning process.' She added, however, that there will be a period of 'wait and see.' 'We still have to see how it all actually works out. These are just the early steps to prepare for a post rezoning world.' A note from city staff said changes could allow projects or sites that don't require rezoning to proceed directly to seeking a development permit. This would include sites in areas such as the Broadway plan or Oakridge town centre. It could make sense for sites that are in pre-zoned areas, but applying the change to the entire city might just delay the lengthy negotiations between the city and a developer from the rezoning process to a later stage. A city staff note proposed that an amendment could include stating that the conditions sought by the city should be limited to those that are 'reasonably required' to address the direct impact of the development. That's vague, said Dean Johnson, senior vice-president of development at Wesgroup Properties. It would mean a developer would not know what it might have to pay in order to mitigate the impact of a project or how it could offset the cost of that until the stage of applying for a development permit, said Johnson. 'That seems a bit broad,' he said. jlee-young@
