Latest news with #RyanBerlin
Globe and Mail
13-05-2025
- Business
- Globe and Mail
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.
CBC
09-05-2025
- Business
- CBC
Metro Vancouver housing prices may lower amid economic uncertainty, experts say
Social Sharing Housing prices could drop slightly in Metro Vancouver amid ongoing political and economic uncertainty in Canada, some real estate experts say. The prediction comes as the latest market reports show a dip in April home sales compared to recent years, and a rise in the number of places for sale. Normally, home sales jump significantly coming out of the winter and into the spring, but that didn't happen this year. "Sales did increase, but the typical seasonal pattern has been quashed by external factors," said Ryan Berlin, head economist at realty company Rennie. During the previous 10 years, sales were on average 79 per cent higher in April than they were in January, Berlin said, but for 2025, April sales were only 34 per cent higher. U.S. President Donald Trump's trade war is making buyers hesitant to commit, a cause cited widely by realtors and other experts, including Berlin. He added that the inherent uncertainty leading up to the Canadian federal election also made buyers nervous. Similarly, industry association Greater Vancouver Realtors, cited the federal election and the possibility of a recession due to the trade war as discouraging potential buyers, despite the favourable scenario of lower interest rates. The decrease in sales means homes for sale are accumulating. Data from Rennie, compiled from multiple sources, shows the number of homes on the market is the highest it's been since 2018. Specifically, there are about 16,000 pre-sale and new homes available as well as 24,000 resale homes in Metro Vancouver. "We are at an all-time high for available homes," Berlin said. Realtor Steve Saretsky said that while it used to take one or two weeks for a condo to sell, it can now take two or three months. Investors flee Investors are also buying less, he said. "Unsold inventory on developer balance sheets is at all-time highs," Saretsky said. This, he said, is because "the investor base really disappeared, which is to say the math simply does not work anymore." Over the past decade, investors have been some of the main purchasers when it comes to pre-sales, buying into a housing project several years before it's built and ready, Saretsky explained. "With the outlook for home prices and rents very negative … investors aren't interested in putting their money into the pre-sale market. So there's a lot of projects that won't get off the ground." For investors who already own, Saretsky said the unstable economy, declining rents and stagnating prices mean many are trying to sell and get out of the market. Affect on price In a statement, Greater Vancouver Realtors called spring 2025 a buyer's market, suggesting that the combination of lower interest rates and high inventory presents "plenty of opportunity for anyone looking to make a purchase." Saretsky said the reluctance of buyers, along with the accumulation of homes for sale, means prices could come down. "The reality is, when you have record inventory for sale or you've got six or seven months of inventory on the market, sometimes the only way to stand out [as a seller] is to have the lowest price, right?" University of British Columbia Sauder School of Business associate professor Tom Davidoff said potential buyers may want to consider giving lower-than-normal offers. "If I were a buyer and I didn't need a place desperately, if I had a place I was comfortable that I could stay, I think I would be doing low-ball offers," he said. "I think bidding five, 10, 15 per cent below asking. Why not? Take some swings." But Berlin said there hasn't been a significant decrease in prices so far. Instead, prices have stagnated. "This is pretty typical because home prices tend to be what we call 'downward sticky,'" he said. However, in some cases, developers with new builds may lower their prices slightly, he said. Having already put a lot of money into a building, a developer may find themselves needing to sell and move on. "If you're sitting on a number of homes that you haven't sold yet, you're unable to extract that capital from the project and invest it in the construction of new homes," he said. Looking ahead, Berlin said political and economic stability are needed for home sales to pick up again. "Until we have some certainty around what Canada's economic strategy is and [what] our relationship trade wise is with the U.S., I think you're going to see the buyer stay right where they are."
CBC
20-02-2025
- Business
- CBC
B.C. construction industry warns of increased costs from threatened U.S. tariffs
Social Sharing The looming trade war with the United States has sparked uncertainty in B.C.'s housing market, with developers worried that the already sky-high cost of new construction is about to be driven up even further. Carla Guerrera, CEO of Purpose Driven Developments, said the threatened U.S. tariffs are making it difficult to anticipate prices for things like appliances and plumbing fixtures, making it impossible for builders to project final costs and keep projects on track. "Right now, we and our partners are frantically trying to look at where we can source Canadian products and divert away from some of the U.S. suppliers," she said. There are tens of thousands of active housing projects at various stages of development in B.C., all now grappling with the uncertainty, not to mention the potential viability of projects planned for the future. "There are escalating costs where purchasing power is already constrained, and so the viability of projects comes into question," said Ryan Berlin, a senior economist at real estate firm Rennie. "To the extent that those conditions remain, we will see fewer projects come to market or launch than we already would have." According to the latest CMHC report, many condominium projects are already on hold due to low demand for high-priced presales. "It exacerbates an already dire situation. We've already got projects stalled. This is going to see fewer homes being built," said Anne McMullin, the CEO of the Urban Development Institute. Fewer projects moving forward in the present raises the potential for even worse supply problems in the future. Unless, of course, there's a swift and diplomatic resolution to the Trump tariff threats. "There just will not be enough new home inventory to probably keep up with what demand will look like over that time, and that's both rental and for sale," said Greg Zayadi, the president of Rennie.
