13-05-2025
B.C. Insider: Problems with Vancouver's Broadway Plan
Vancouver's Broadway Plan envisions a forest of towers lining that central thoroughfare and the blocks on either side of it, a plan that accommodates 20- to 30-storey buildings offering multitudes more housing.
The Broadway Plan was created in part to address the desperate, indisputable need for more housing in Vancouver.
So it's vivid irony that the same development community that is supposed to be providing this surge of new supply is finding itself with hundreds of units that can't be sold.
Frances Bula reports today that one of them, Boffo Developments, has refunded – with interest – buyers of its presales efforts on the first of four towers it had planned in a Burnaby development.
Only 44 of the 318 units in the first tower sold between July and December last year, and then sales fell off a cliff completely in the new year.
Ordinarily, said Karen West, vice-president for marketing and sales with the company, Boffo would see about 90 sales in the first three months.
The company paused the project, is returning deposits with interest, and waiting for better conditions.
In another telling sign of trouble, Rennie Marketing, one of Greater Vancouver's major presale marketing companies, last week laid off 25 per cent of its staff.
'It's like this cascading waterfall of bad news,' said Ryan Berlin, Rennie's chief intelligence officer.
In metropolitan Vancouver, there are currently 2,500 condo units completed and unsold, and that number could climb to 3,700 by the end of the year, Berlin said.
Central 1 Credit Union economist Bryan Yu said Monday the industry is in recession.
As Kerry Gold reported, it's a problem that has been brewing for months.
Developers have been hit with uncertainty and elevated costs because of the U.S.-instigated trade war, as well as regulations designed to dampen a market once driven by speculation and investment.
All those factors have driven away investors.
Berlin said that from 2020 to 2023, investors represented half of Rennie Marketing's buyers. By 2024, they made up one-quarter of buyers. This year, only 7 per cent of buyers are investors, he said.
The investor buyer has kept the condo market going for decades, Kerry writes. Willing to put up the deposit far in advance of the completed building, the investor enables the developer to obtain financing to construct. Once completed, the investor finds tenants for the unit, and investor landlords became a significant source of housing in the rental market. When lucrative rents were achievable, and borrowing money was cheap, the investor could easily cover costs, known as positive cash flow.
For the non-investor, the buyer who wants a place to live, Berlin said, his company is seeing a lot of those people adding family members to their presale contracts as a way of qualifying for mortgages.
Market conditions mean many buyers are finding their units assessed at less than what they paid for them, which means banks are reducing the amount they will lend and buyers are having to make up the difference with additional cash of their own, Berlin said.
For those who can't manage a larger down payment on a lower-valued condo, some presale buyers are simply walking away from their very large initial deposits.
That's another squeeze on developers, and in Toronto, some are fighting back: Developers there have initiated more than a hundred lawsuits in efforts to get their full purchase price from presale buyers.
Prices have come down, which should be good news for some. Berlin said that in downtown Vancouver, where prices pre-COVID could reach $3,000 a square foot for a luxury condo, now those rates are no more than $1,800 a square foot.
But demand has dried up, leaving thousands of units unsold at prices too high to meaningfully tackle the housing shortage.
This is the weekly British Columbia newsletter written by B.C. Editor Wendy Cox. If you're reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.
