Executives in the Vancouver’s real estate industry warn about an excess of recently built and empty condominiums throughout the region.
Around 2,500 new condominiums are sitting without selling and empty in Metro Vancouver, according to the Canada Mortgage and Housing Corporation (CMHC).
That number is double what was last year, according to CMHC.
Anne McMullin, president and executive director of Urban Development Institute, says that the reason is that condominiums cost more to build what local residents can pay.
“The costs have increased so much in the last 10 years that building a unit is outside the price range of 80 percent of the public in the Vancouver Metro area,” McMullin said.
Developers do not want to sell with losses, according to McMullin.
“You’re not going to build to lose money.”
She said the market had been absorbing climbing costs, including the increase in labor costs and materials, for years, since industry professionals felt prices would continue to increase.
But now it also blames recent government policies that have increased the cost of construction.
“The cost associated with policies at the three levels of government has caused us not to build what people can pay,” he said.
Some developers are now giving deposits to buyers because they do not meet presale objectives to ensure bank financing for new projects.
“There are also some developers who have really entered a judicial administrator because they had sold or tried to develop … As prices intensified.”
She said some companies are already saying goodbye to staff.
“There is a potential storm and it is scary.”
She said that she hopes that the cities of the region will review their various policies and requirements, including those of non -market rental housing, energy steps and public art codes.
The president of the Vancouver Development Company, Rennie Greg Zayadi, said the marketing of the market has been happening since March 2022.
“But yes, during the last year it has become very real,” said Zayadi.
He said that the real estate industry had about 20 years very good, but the recent decrease in sales of new condominiums will have large domain effects on the labor market.
“The last time we saw this level of inventory not sold of developers was 24 years ago.”
Zayadi said developers have to understand that people who spend $ 800,000 for a condominium do not want a 450 or 500 square feet condominium.
He said that buyers these days expect to obtain 800 to 1,500 square feet for between $ 800,000 and $ 1.2 million.
“We need to reach a point where we can deliver inventory as an industry, as a province, at $ 700 to $ 900 per square foot. That is $ 200 to $ 300 above where the market is today.”
He said that the unveiled condominiums are strongly concentrated in Burnaby, Coquitlam and parts of Surrey.
Oleg Garyuk, Royal Pacific Realty real estate agent, said older condominiums tend to sell better than presale condominiums.
“The new inventory tends to sit on the market,” he said.
He said that the designs of some of the new houses are a reason for the lack of interest of the buyer, as well as the lack of parking spaces that are more difficult to sell and rent.
Garyuk said developers are launching a variety of incentives for people to buy constructed units.
“They are throwing parking stalls. They are launching storage boxes. They are giving a setback in the completion.”
He said he believes that some developers have put too many eggs in the “investor basket.”
“At this time, many condominiums [are] Online so that people really don’t want to live. “
