Latest news with #UrbanDevelopmentInstitute
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."
CTV News
02-07-2025
- Business
- CTV News
B.C. easing rules on upfront costs for homebuilders to spur project construction
Ravi Kahlon, now B.C.'s Minister of Housing, speaks at a restaurant in Delta, B.C., on Wednesday, September 15, 2021. THE CANADIAN PRESS/Darryl Dyck 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 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.' This report by Chuck Chiang, The Canadian Press, was first published July 2, 2025.
Hamilton Spectator
02-07-2025
- Business
- Hamilton Spectator
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 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.' This report by The Canadian Press was first published July 2, 2025. Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy . This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Want more of the latest from us? Sign up for more at our newsletter page .
Global News
02-07-2025
- Business
- Global News
B.C. to ease rules on builders to spur new housing 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. 2:01 Municipalities push back over latest provincial list of communities getting housing targets 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. Story continues below advertisement 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 financial burden for builders. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy 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. 1:58 New realtor trends emerging as housing market cools 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. Story continues below advertisement 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.'
