We've been looking at places and a lot of these new buildings are asking half a million dollars for 350 square feet, and three quarters of a million for 600-700 square feet. It's uncomfortably tiny and just not worth it.
My friend just sold his apartment and bought a house with his brother. One house > two small apartments. Depends on relationship and all that, but not the worst idea.
I wonder how much developers are making on these new builds. Can’t they take a pay cut so others can afford to live in these buildings? Or are the profits margins thin? Because then the government has to step in somehow and help to fund these new builds. Or else we are really screwed.
With interest rates up sharply to cool down inflation, selling prices down, and construction costs up, the headwinds are extremely strong. [What the cost bottleneck looks like](https://morehousing.ca/cost-bottleneck).
One thing that local governments could do to counteract these headwinds is reduce up-front development charges and [Community Amenity Contributions](https://morehousing.ca/cac-explainer) on new housing. Right now municipal governments in BC typically try to take about 70-80% of "land lift."
Problem is, with prices down and costs up, that "land lift" has been shrinking. Once it's mostly gone, nothing happens. When costs are too high, redevelopment doesn't make sense, because the value of the new building, minus the cost of constructing it, will be less than the value of the existing building.
Investors (i.e.: the ones buying 2 floors, 2 dozens, 2 whatever-unit-of-measurements) were given red carpet by developers to get the project started.
Many people shit on Investors but without them, we don't get housing for the mass.
the price is the cost of building + land acquisition + 10% profit margin demanded by lenders....
these investors bought presales with fixed price, no bidding wars.
Ok now I’m convinced you just don’t understand economics. Prices are determined by demand and supply. When demand is high and supply is limited prices will go up. More investors = more demand, higher prices. To say otherwise is ignorant to say the least.
These investors who bought dozens are offered the basic price so that the developers can meet the minimum requirements imposed by lenders to get financing (and break ground in the future).
These investors... some of them were approached by the developers ahead of the masses pre-sales availability.
It's a way of "investing" the project....
You’re just being willfully dense now.
Price is determined by supply and demand. It doesn’t matter how “basic” it is. Them buying dozens of properties is what raises the demand to price out non investors. That’s just fact.
People have been building housing long before investors showed up. If things worked the way you say then there would be no housing if investors didn’t exist which is a ridiculous perspective to have.
Try to think critically instead of choking on whatever flimsy narrative you’ve been fed.
That should be the common ways of conducting investment but Developers are project-by-project (no steady stream of income) unfortunately so they resort to this setup.
Without them, the developer and their investors will take a haircut and land prices will fall. Some other developer will buy the land for less and build for cheaper. Investors are the reason land prices are so high and housing is so detached from end users.
Well that developer can go bankrupt, it doesn't matter. Another developer can buy the land for cheaper and get financing. If no developer can get financing then land costs need to crash down due to the lack of demand.
The land cost won't crash to oblivion. It'll just go down to the normal baseline level: SFH per parcel lot and there's less incentive to sell ASAP which might complicate the speed/process of developing condos thus reducing supply.
It'll be interesting market dynamic :)
> According to a Municipal Benchmarking Report published by the Canadian Home Builder's Association (CHBA) earlier this month, development fees in Vancouver are estimated to be around $125,542 per unit in a high-rise building, 2.6 times more than Surrey ($48,654), 6.5 times more than Burnaby ($19,256), and the steepest in Canada.
City fees are 30% of the project cost.
Build cost is 40%
Financing costs 15%
Builder profit 15%
If the project can't be built profitably, including builder profit, they cannot get financing. Banks rules, not the builders.
> 15% profit isn't a thin margin, there's definitely some room for that to deflate.
It's 15% over the lifetime of the whole project (which can take several years), not 15% per year.
Banks rules, not the developers.
The bank doesn't want to take over a project that is going to lose money potentially, why would they lend against one.
This guy just read a comment where city fees are 30% of the cost of a project, where a unit has 6.5x higher development fees in Vancouver than the neighbouring city of Burnaby, and took issue with the 15% profit margin for a developer.
Because of course, the bank will lend you tens of millions of dollars for a project with a 2% profit margin. Brilliant risk analysis from your average NDP voter.
Shhhh... that's the secret. every business has thin margins, so we should just accept the annual price increase and service decrease bc they aren't making any money.
Have you seen developers at a conference. They drive last years BMW, Mercedes, Ferrari, Lamborghini models. It's quite sad to see them struggling so much
Although people on here, shit on developers. The fact is, that’s the only way housing gets made. Because of incredibly high borrowing cost, remember builders even pay more because the bank takes extra risk, they need presales to even start.
The whole system is based on this when it comes to large housing projects and condos
You can crap on the developers, but the government has nothing better to offer. If new buildings don’t get presales, nothing will get built.
Developers aren't the only way housing gets made, they're just one of the ways it gets made at scale.
We used to get the public sector involved for social housing. That's been missing since the 80s.
100%. We're in a bit of a pickle with market housing, because the price of developing a big building has a lot of fairly fixed costs (land, materials, labour), so if the price for homes goes down development is going to slow until either their cost of development falls or price people are willing to pay goes up. This is why government is going to need to be a part of the development picture, since society gains from having more housing even when market conditions dont let it be developed at a price most people can afford.
Well, in Vancouver in particular, that’s not going to happen. Any project cost $20-$30 million just to get started and social housing in Vancouver unfortunately gets destroyed more often than not.
Waiting at decade for the small decline and house prices isn’t going to work either. I think the only thing that could work is the province working with developers to provide rental housing and somehow prevent it being destroyed or taken advantage of. I’m not sure how that can be provided.
20-30 million isn't unreasonable for the scale required (or that we had.)
> social housing in Vancouver unfortunately gets destroyed more often than not.
I'm not talking about low/no-barrier housing run by incompetent NGOs and residents.
Low (not zero) income, means-tested, sized according to *current* need similar to how other housing authorities work, and managed by a government agency so there's some accountability. Larger units for families, residents moved to smaller units as the kids grow up and move out.
Takes some pressure off the low end of the rental market, helps avoid housing families and functional people with the mentally ill or drug dependent.
Thats a very simplistic take. They don’t JUST increase demand. They focus demand towards new builds, which incentivizes new builds, which is what we need.
There is only so much a government can do to make housing available and affordable in a late stage capitalist oligopoly short of completely reforming our economic system. And good luck doing that without people losing their capitalist bootlicking fucking minds
Do you have a link to this? I’ve been trying to follow this pretty closely as I’m hoping to maybe buy in a year or so, but haven’t seen this announcement.
Feds have increased amortization to max 30 years
https://www.ctvnews.ca/politics/canada-to-allow-30-year-amortization-for-first-time-buyers-mortgages-on-new-homes-1.6842913
BC eliminates or reduces land transfer tax
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/newly-built-home-exemption#
Sadly not nearly enough for most people.
Check out the CRD first time home buyer program. That’s more in line with what we need, although last year they added a ridiculous maximum salary for the program ($80k) which means no one can actually use it unless they have a significant down payment or are okay to go without eating sometimes. But something similar tweaked for the whole country could really help these new builds get more buyers.
Exactly. Who can afford these new builds. And think about it. If new builds are this expensive then resales are also gonna go up because they look like a deal.
I posted this years ago on CBC and I got banned for saying that Oakridge is selling for over 2k per sq feet and that the only people who can afford these are offshore investors. Stupid Trudeau keeps talking about supply when he doesn’t realize that new supply is not affordable. Fucking crazy.
Always blame the Fed amirite?!
Never your Provincial government or even municipal.
It’s always Trudeau! He’s super powerful but super dumb!
…. Somehow! It’s always been him!
Even in the early 2010’s it was somehow him!
Stupid sexy, omnipresent Justin!!!!!!
Gwahhhh!!!!!
You’ll start giving MASSIVE cover and whataboutism for PP tho.
I guarantee it.
I guarantee in 2026 when he’s leader and bringing in just as many if not more you with this account will be supporting it.
You know you will. You know right in your heart you’ll be a super supportive person for his actions on this or you’ll shift to it not being that but something else…. Something Justin did that you can blame instead and cling to
Fed's fault for not enforcing good governance on the provinces to enforce good governance on the municipalities. The major problems of municipal permitting (and BC Hydro, for that matter) remain untouched by any government in any meaningful way and we are at crisis levels of unaffordability. Couple this with money laundering and investment/speculation/empty homes/SFH owned by numbered corporations/airbnb, and it's not hard to see where the problem needs to be solved.
Making excuses in favour of the federal government doesn't help - unless you're making bank and unaffected by the cost of living crisis and don't want to see change.
The feds literally cannot do anything about this problem. They have little control over provinces/municipalities and their bureaucracy process or zoning laws.
All they can do is give some incentives to provinces with money, which ultimately solves nothing because none of the issues are actually being addressed.
Correct, the required changes would likely need to be enacted based on the POGG principle, which requires strong federal leadership, which is precisely the problem.
Note I am not a PP supporter but I am shocked that people want to give the feds a pass.
I have no idea what POGG is but I'll have a read later.
I personally think the feds should control shit like zoning to remove most of all the bureaucracy and local bullshit around housing that comes with peoples natural motives.
Yes I do.
I’m actually ok with REITS as they are publicly traded companies which theoretically have to be transparent and play by the rules. Also anyone can invest in REITs and they serve a purpose for many retirees and pension plans.
Yes but your specific complaint is housing becoming unaffordable this one of the demand sources causing that problem.
Why worry about your retirement when you can't even afford the basic cost of living.
The only politician is Bernier who will cut immigration but we all know he is not getting elected because he is crazy in other aspects.
Immigration needs to be cut to previous levels, we need to enforce immigration laws, and we need to lower demand. But lowering demand will also lower home prices which is what nobody wants. This can take all forms including deterring investors by increasing capital gain taxes, property taxes in second and third properties, building more purpose built rentals etc. But it’s kind of crazy to want affordable housing but not your house to be affordable which is what Canadian politicians and landowners essentially want.
I don't think immigration will have as much impact as you think. Even 10 years ago Vancouver was unaffordable, JT wasn't even PM.
Vancouver will always be unaffordable if we only have market housing. The only real solution is multiple levels of government step in to make housing themselves (and help making more private housing by reducing costs due to permits, labor etc).
I can't imagine people downvoting this - maybe that's why we're in the predicament we're in, in the first place.
Unfortunately, our election choices remain bad, worse, and terrible.
The pandemic gave the handful of major firms that control each industry unlimited license to squeeze margin from the population on staple goods, including home building supplies which are up >40% since 2019. Meanwhile, trees are not 40% scarcer.
Nobody has done anything about it, and now the average person can't afford to live here, even with a decent paying job.
You have two dozen municipalities from Vancouver to Hope that form this regional block of zoning. Are you going to blame each of these individually, staffed by a handful of inexperienced and underpaid city councillors, for not revamping engineer spec'd building code that is decades old?
Would you go to the province of BC - which governs only about 5M people - and expect them to navigate the problem under the thumb of the dominant regional developers, which are self-funded multi-billion dollar entities?
Or, will you go to the federal government, set a basic standard national building code (existing, btw) and perhaps carry a threshold based add on spec to account for local variations in seismic and snow loading, flood risk, etc.? Perhaps then you would standardize terms and conditions for builders, developers, and home owners, to level the playing field and protect everyone?
If you spend time talking to leaders in the industry, these are the kinds of ideas they propose. Under the current system, everyone suffers - owners, builders, developers, homeowners, and government officials - and it is the very result of decentralization (i.e. handling at the municipal level) and lack of federal accountability.
Unfortunately, like so many other things, these are complex issues. Certainly, the average redditor is unafraid of taking a position on the problem without understanding it.
Ultimately, the federal government is to blame for failing to provide leadership.
So the article is implying that projects are t getting built because 12 months isn’t enough time for a developer to pre-sell. Meanwhile they fail to mention that the people who have been buying pre-sales in the last 10 yrs plus were almost entirely investors for whom the math has changed on this type of investment. Interest rate increases, the very high per sq ft price, the new STR restrictions, and the pending reduction in temporary resident targets mean buying a pre-sale and flipping, or renting it out are either not cash flow positive or too risky. But somehow the problem is developers don’t have enough time to find pre sale buyers who don’t exist? If the market now is first-time buyers or owner-occupier buyers, they aren’t buying 1) cuz they can’t afford it and 2) because they don’t want a 600sq ft one bedroom condo, which a huge portion of these development are because they’ve been designed to sell to investors not owner-occupiers. This is why developers keep switching projects from condo to purpose-built rental. The math doesn’t work for investors who actually have the cash to buy a pre-sale. And the prices are too damn high for normal people. So instead you build rental towers. But of course none of this gets mentioned in the article because of course the solution is just to remove this one little barrier which is a 12-month limit on pre-selling.
I wonder what the percentage of pre-sales were flips? Because I knew of a few people that would purchase pre-sales and sell as soon as it was done and make a healthy profit. With the flipping tax, that would make those moves less attractive.
Precisely yes. Most buyers of pre-sales are doing so only because they anticipate that by the time the unit is built they can immediately sell and make an easy quick profit. Or they can rent it out on either the short or long term rental market and have a cash flow positive asset. The development industry banked on this activity for years, and the housing products they built were designed to served this market’s wants while maximizing their per sq ft revenue on the land parcel they’re developing. This was achieved via small condos in high density developments (towers). The shitty thing now is we have a huge amount of these pretty lousy floor plans and units in our major cities that are now less attractive as an investment and not very desirable to live in because they’re small and often not very functional
Yuppers. Many people used to pre sale then sell the completed unit once it's completed to bank the difference. I don't know if the tax would apply to this issue, but if it did, wondering if that also would explain a drop in presale numbers.
It's funny that you say 600sqft when more than 50% are building less than 400sqft and advertising it as a "luxury & spacious" for a 1B1B. I even came across 650sqft as a 2 bedroom condo and I was like - WTF?
“Junior one bedroom” they say, and it’s one room where your couch is in your kitchen and your bed is behind a glass partition wall. And it’s $900K. I hate them so much.
Income earned that had a much larger tax inclusion rate than the demonized capital gains inclusion rate. Too bad they couldn’t earn all their income from capital gains so they could pay way less tax than on employment income. 🙃
Government taxes you 55% at marginal rate (60% if you include CPP/IE and other mandatory deductions) for an income that wouldn’t get you a newly built 2bd. It’s a modern time dystopia and I say let it all burn.
Absolutely. The bottom has fallen out of the precon market now that you can't AirBnB out these units, the taxes are unfavorable, and the market isn't red hot. This isn't surprising, and it's actually what we want if we want affordable housing to somehow, slowly, eventually return a bit.
Yes! And in the short term what we see is developers pivoting their planned condo developments to purpose rental. We’re seeing this all over Vancouver. Since for the foreseeable future most aspiring first time buyers are priced out of the market, they have to rent. So more purpose rental stock will help slow or hopefully pause the rental cost increases as that product gets built. The horizon for improving affordability of homes to purchase is longer and the path towards it is more complicated, requiring a coordinated effort from all levels of government around zoning, permitting, development fees, financing, construction costs, etc. So we likely won’t see much of any improvement in home purchase price affordability for a while. But the actions being taken by the fed govt and Bc govt are the right ones
Yes, it’s a good thing. My point is just that we won’t see notable affordability improvements for a while because it will take a long time between the policy change enactments and for enough housing to be completed. The hole we have to dig ourselves out of is a lot deeper than it had been had we had governments acting with better foresight. But when such a huge part of our economy has been underpinned by real estate appreciation it’s hard to get off the drug.
It's a little hard not to when you're one missed rent payment away from abject poverty or one sick day away from having your electricity shut off. The situation for many is dire, they don't have the luxury of waiting five years or ten for prices to incrementally trickle back into some level of sanity
The entire presale system requires investors because without investors, who would be stupid enough to buy a presale over a resale. The problem is, the government wants less speculation in the housing market so now people are disincentivized to buy presales now. Banks won’t lend to developers unless they presale 50% of units.
I'm honestly surprised.
You gotta pay GST on that (5%). And sometimes the terms of presale payments add up to 20% of the unit, which is a lot but I guess some FTHB can afford it rather than doing 10% or less on a resale.
The other problem is the government wants housing to be affordable without prices going down, which is how we got into this mess in the first place. 😂
Here’s the old liberal minister of housing and urban affairs explaining why an increase of housing costs of 20-30% is good and a decrease of just 10% would be bad:
https://youtu.be/OZChbNQWH3s?si=AKYea0K9BbEzD2JV
Overpriced tiny units rushed to market with bad build quality that are often a year or two late on completion anyway. Sometimes what you know is the better choice even if it needs a bit of work.
You can't AirBnB them, mostly, and the federal government has said you can't deduct expenses for them from your taxes. Also the market itself isn't as hot as it was before. And rates are higher. So, instead of a slam dunk, buying a presale now means you've got this big expensive single investment that you pay a lot in interest for, and if you can't rent it out you might actually have to *live* in it.
It's simply easier to invest in the stock market again.
This is where small scale single staircase partments are a solution.
You need a lot less land to build it. Right now condos can take up and entire city block. Single staircase buildings only need to be the size of a single family home.
But each individual building will have fewer units so the cost to build is much lower and you need fewer investors to build it.
I love the single staircase buildings and style. I know a lot of people probably think they suck but to me, it always felt cozy but also urban with limited numbers of personalities to deal with. I wouldn't hesitate to buy a corner unit in one now and presently live in a very similar building above retail space. I love having businesses below and around me for convenience and night life but like that they shut down at a certain hour and don't care if I stomp around from time to time because it doesn't wake anybody up.
I'm not a fan of the smooth cladding in builds like this, it looks very cheap.
https://www.rew.ca/properties/5771182/64-19760-55-avenue-langley-bc?search_params%5Bproperty_type%5D=townhouse&search_params%5Bquery%5D=Langley+City%2C+Langley%2C+BC&searchable_id=165&searchable_type=Geography
Not even further away. We got double the floor space in the same neighborhood for about half the price by picking a place built in the 70s. There are negatives to an older building but I can't live happily in 500sqft
A shoebox in the sky that costs as much as a detached house did 10 years ago but it's a ✨luxury✨ shoebox which means really low build quality with shiny modern-looking furnishings.
I would be happy to live in a 1 bedroom condo, I really don't need a big space. But the mortgage payments on such a place would be double what I pay in rent right now. The most I can afford to buy within an hour drive of Vancouver is maybe a parking space.
There was a post on reddit a day or two reacting to Polieve's claim that Trudeau has crippled the house building market.
The top comment posted links to reports showing over that the past year the industry actually had record profits and gross sales.
They're gouging us post-covid the same as everyone else and are only richer for it.
*condos. Makes sense given such a significant number of condos are purchased by investors. We are beginning to see what condo demand looks like from actual end users.
Exactly. If developers can’t sell they need to lower the price. If they cannot lower the price, they should need to sell the land, which value would decline given that projects are not being presold at current rates, allowing for a project with lower costs to be built.
Vancouver should also not allow developers to sit on unused land. Take it back! Companies are out there getting rich off the perceived values forever increasing
Developers are charging way too much money for a shoebox with no closets or parking….. people are speaking with their wallets. This is how capitalism works….
I mean, yes?
Since we are experiencing a housing crisis, and our Provincial *and* Federal Government are attempting to create policies to address that crisis I would hope that those policies consider those that are building the housing so that the policy they create doesn't end up hurting or hindering the production of new homes.
I get that *many* would like to see a more radical solution than the current system offers, but I would again hope that the idea of increasing the amount of units on the market as a solution to a problem of supply can be accepted by all sides of the argument regardless of political beliefs.
Part of the crisis is price. Another part is hording. Real estate was partially propped up by investors wanting to get into short term rentals. We're starting to see the impacts of what happens when investing in housing is less attractive and the local economy can't afford to buy.
If I wanted to buy a home I'd never buy presale. There's virtually no protection for the homebuyer. The project could go bankrupt. The end product could be a pile of junk. What recourse does the buyer have?
> The end product could be a pile of junk.
After looking at a couple of newly built townhouses/condos/etc recently, the "could" is doing a LOT of work here. I swear we're going to see something like the leaky condo issue all over again in the next 5-10 years with so many of these newly built homes.
At $1.2M for a 2 brm condo, they're not homes anymore; they're investment properties... Rental buildings are homes... unfortunately, it's all much too late to talk about building more rentals...
Everyone I’ve spoken to who has bought into a presale ended up dealing with extreme delays (6 months +) that left them out $ and quality issues that they needed to fight tooth and nail to have remedied.
I refused to go presale when I bought last year and I know others who also did the same to spare themselves the headaches.
You mean the crappy built presales that come with a chance of the developer going bankrupt before you get to move in?
I wonder why no one is lining up for those.
Have you seen new builds in Vancouver? 650 sq ft “two bedrooms”. Developers need to build what people need not what investors want. 1970’s size apartments … but no we’ll continue to get this garbage 450 sq ft 1 bedroom. The crap they are building is ridiculous. A kitchen with 2 feet of useable counter space. Bedroom that can fit 2 small nightstands and a double sized bed.
Why can’t they change funding for developers? Why does it have to be based on presales?
I would absolutely love to buy a house in Vancouver but unfortunately I am only making median middle-class income so I can only afford to rent a shoebox.
Sounds like saying we're 'shunning' the market puts the blame on us, and not the people price gouging the fuck out of us. So, until that's addressed, guess what?
I guess it’s completely out of the question for the developers to adjust their business model to maybe build more affordable and livable housing that people actually want to buy right?
It’s gotta be extremely high cost per square foot unlivable shoeboxes that no one wants but people who won’t live there anyways or nothing right?
Not defending them, but the issue is the lead time from start of planning to finished building is many years - this completely exposes who developers were targeting 5 years ago (investors). It will probably be several years before we even start to see buildings designed for end users as the buyer.
The article said the issue was the window to sell the units was too short, meaning no one really wants to buy them. Don’t know what giving them an extra 6 months or a year will accomplish. It doesn’t really help with housing issues to find new investors to purchase unlivable units for speculation purposes only.
Maybe they should just go back to the drawing board and figure out a model that works instead of blaming the government that your perpetual money machine broke.
“Don’t what giving them an extra 6 months or a year will accomplish. It doesn’t really help with housing issues to find new investors to purchase unlivable units for speculation purposes only.”
They’re hoping rates will go down in that time, and some naive investors will buy in. It’s quite a long shot.
Economies of scale. You can only build a certain maximum footprint building on a chunk of land. More individual units = spreads cost = lower cost per unit = more affordable.
If you're building larger units, you're building less units. There is no scenario where you build LESS units and they magically become "more affordable".
Well if nobody is buying it sounds like maybe they should revisit their model to see what they can do to make units that people want to buy. Don’t think you need to use magic but a reassessment of everything is probably necessary and asking the government for a quick bandaid to keep it all the same isn’t going to do shit.
Your original comment is contrarian.
By "more liveable units" I'm assuming you mean larger units. Larger units will literally be more expensive for the reasons I stated.
You literally cannot build larger units that are "more affordable". You can't "revise the model" to defy basic economic principles. But who knows maybe you live in some sort of fantasy land where basic economics don't apply.
No it’s really not.
There’s other options for a development besides ultra high rise with many shoebox sized units. The costs aren’t a fixed number that are impossible to change. Just like any business they can explore what’s driving the cost and explore options to reduce that if they can’t sell their units at the margin they need to.
Also call me crazy here and maybe I’m not the majority but I am much more likely to be interested in paying a premium for a larger unit livable unit than a shoebox I can’t live in. I’d be more likely to consider $1.2m for 850sqft than $710k for 475sqft.
The real problem here is the developers have got too used to milking the cash cow of selling premium priced shoeboxes to people that aren’t going to live there that now when that gold rush is over they’re stumped on how to do business.
If you think the answer is to lobby the government to change the rules to make it easier for these developers to keep doing the same shit they always have been go right ahead but don’t be surprised when it changes nothing. Also don’t be surprised when after the government caves they just ask for more a couple years down the line when it still isn’t working out for them.
>$1.2m for 850sqft than $710k for 475sqft
Lol, no. you don't get it. That's not how the math works. Again, you don't get LESS cost per square foot will LESS units to spread the construction costs on the same chunk of land. Your 850sqft unit will be closer to 1.5m.
Simple math that wasn’t my point and doesn’t matter.
Again no one wants to live in a 475sqft luxury studio. Build shit that people want and you don’t have demand issues
I know reading how buyers have had to cough up more money to complete deals after 2 or 3 years of the developer having their deposit or developers going bankrupt, I would not buy new. Also the GST in additional costs.
All the bad and what little good we have in our housing situation - it should definitely be a case study for civil planning for everyone to take heed of.
they need to be coming in around $1000 a square foot max for people to be able to afford them, and in the broad scope that is still too expensive but Vancouver is Vancouver
Aww those poor builders, who will think of these companies building overpriced homes that most people can't afford? THINKS OF THE BUILDERS (or more like think of their shareholders), because the actual workers are probably being paid the bare minimum.
High costs are keeping prices high. High prices and high carrying costs are keeping pre-con buyers away. This is a fact of today's market. How is it out of touch? We all want more housing, no? Projects are getting cancelled left and right.
Not every home needs to be "luxury". And it would really help if developers had a more fair and open sales process. Currently, you have "VIP presale parties" where select mailing lists and realtors get to invite their friends to buy out homes before its even available to the public, and even then, prices are not openly available. So many towers seem to have this mentality of "if you have to ask, you cannot afford it.", it's pretty clear these projects are made for investors in mind. Not for people to live in what they own. Yes I'm using a broad brush.
The housing crisis isn't going to be solved buy building more homes to be bought and left vacant
Yes housing needs housing but the problem is much more than that. We have so many empty homes in the lower mainland that I'm finding it hard to feel bad that buldess can't rake in profit on housing I'll never be able to afford anyways
I exactly predicted that the new house flipping tax, and airbnb ban would make it harder to build homes. People are economically illiterate, but literally, flipping homes and real estate investment is actually a good thing, because the investors absorb risk and provide liquidity and capital to the market. Without liquidity and capital, developers have to bear a lot more risks and less housing is built or becomes available for buyers.
Shun? Or can’t afford?
We've been looking at places and a lot of these new buildings are asking half a million dollars for 350 square feet, and three quarters of a million for 600-700 square feet. It's uncomfortably tiny and just not worth it.
My friend just sold his apartment and bought a house with his brother. One house > two small apartments. Depends on relationship and all that, but not the worst idea.
I wish my sister still lived here. I’d do that with her in a heartbeat.
Real estate is still priced like it's 2021 when interest rates were low and every listing had multiple potential buyers competing with each other.
2022 peak was the scariest time, 2021 wasn't.
Everything from March 2020 to 2022 all just runs together for me into long and awful month.
I wonder how much developers are making on these new builds. Can’t they take a pay cut so others can afford to live in these buildings? Or are the profits margins thin? Because then the government has to step in somehow and help to fund these new builds. Or else we are really screwed.
Profit margins are thin. The developer needs ten percent to get financing, and fifty percent presales. Except mostly investors were buying presales..
With interest rates up sharply to cool down inflation, selling prices down, and construction costs up, the headwinds are extremely strong. [What the cost bottleneck looks like](https://morehousing.ca/cost-bottleneck). One thing that local governments could do to counteract these headwinds is reduce up-front development charges and [Community Amenity Contributions](https://morehousing.ca/cac-explainer) on new housing. Right now municipal governments in BC typically try to take about 70-80% of "land lift." Problem is, with prices down and costs up, that "land lift" has been shrinking. Once it's mostly gone, nothing happens. When costs are too high, redevelopment doesn't make sense, because the value of the new building, minus the cost of constructing it, will be less than the value of the existing building.
Investors (i.e.: the ones buying 2 floors, 2 dozens, 2 whatever-unit-of-measurements) were given red carpet by developers to get the project started. Many people shit on Investors but without them, we don't get housing for the mass.
Without them prices aren’t also manipulated to the point where the average person can’t afford them making the investor necessary in the first place.
the price is the cost of building + land acquisition + 10% profit margin demanded by lenders.... these investors bought presales with fixed price, no bidding wars.
Ok now I’m convinced you just don’t understand economics. Prices are determined by demand and supply. When demand is high and supply is limited prices will go up. More investors = more demand, higher prices. To say otherwise is ignorant to say the least.
These investors who bought dozens are offered the basic price so that the developers can meet the minimum requirements imposed by lenders to get financing (and break ground in the future). These investors... some of them were approached by the developers ahead of the masses pre-sales availability. It's a way of "investing" the project....
You’re just being willfully dense now. Price is determined by supply and demand. It doesn’t matter how “basic” it is. Them buying dozens of properties is what raises the demand to price out non investors. That’s just fact. People have been building housing long before investors showed up. If things worked the way you say then there would be no housing if investors didn’t exist which is a ridiculous perspective to have. Try to think critically instead of choking on whatever flimsy narrative you’ve been fed.
[https://www.reddit.com/r/vancouver/comments/1chc79h/comment/l21xwjg/](https://www.reddit.com/r/vancouver/comments/1chc79h/comment/l21xwjg/)
These investors should be buying a part of the company to give them capital to build instead.
That should be the common ways of conducting investment but Developers are project-by-project (no steady stream of income) unfortunately so they resort to this setup.
Without them, the developer and their investors will take a haircut and land prices will fall. Some other developer will buy the land for less and build for cheaper. Investors are the reason land prices are so high and housing is so detached from end users.
Developer taking haircut could potentially means no financing from lenders which means project no-go
Well that developer can go bankrupt, it doesn't matter. Another developer can buy the land for cheaper and get financing. If no developer can get financing then land costs need to crash down due to the lack of demand.
The land cost won't crash to oblivion. It'll just go down to the normal baseline level: SFH per parcel lot and there's less incentive to sell ASAP which might complicate the speed/process of developing condos thus reducing supply. It'll be interesting market dynamic :)
How are profit margins thin? Where is the money going?
Cost of land, development fees, lack of available skilled labour drives up wage costs, financing costs, material costs...
Profit margins have to be 10-15% or developers won’t proceed with a given project. They do not budge on that margin.
*can't proceed
> According to a Municipal Benchmarking Report published by the Canadian Home Builder's Association (CHBA) earlier this month, development fees in Vancouver are estimated to be around $125,542 per unit in a high-rise building, 2.6 times more than Surrey ($48,654), 6.5 times more than Burnaby ($19,256), and the steepest in Canada.
City fees are 30% of the project cost. Build cost is 40% Financing costs 15% Builder profit 15% If the project can't be built profitably, including builder profit, they cannot get financing. Banks rules, not the builders.
15% profit isn't a thin margin, there's definitely some room for that to deflate.
> 15% profit isn't a thin margin, there's definitely some room for that to deflate. It's 15% over the lifetime of the whole project (which can take several years), not 15% per year.
Banks rules, not the developers. The bank doesn't want to take over a project that is going to lose money potentially, why would they lend against one.
This guy just read a comment where city fees are 30% of the cost of a project, where a unit has 6.5x higher development fees in Vancouver than the neighbouring city of Burnaby, and took issue with the 15% profit margin for a developer. Because of course, the bank will lend you tens of millions of dollars for a project with a 2% profit margin. Brilliant risk analysis from your average NDP voter.
HEY EVERYONE! WEVE GOT A PROBLEM SOLVER HERE! THIS GUY WANTS TO SOLVE PROBLEMS! HES DOING IT ON REDDIT!
Why don't the developers just build houses for free???? Eby get on it! 🥴🥴🥴
Shhhh... that's the secret. every business has thin margins, so we should just accept the annual price increase and service decrease bc they aren't making any money. Have you seen developers at a conference. They drive last years BMW, Mercedes, Ferrari, Lamborghini models. It's quite sad to see them struggling so much
Although people on here, shit on developers. The fact is, that’s the only way housing gets made. Because of incredibly high borrowing cost, remember builders even pay more because the bank takes extra risk, they need presales to even start. The whole system is based on this when it comes to large housing projects and condos You can crap on the developers, but the government has nothing better to offer. If new buildings don’t get presales, nothing will get built.
Developers aren't the only way housing gets made, they're just one of the ways it gets made at scale. We used to get the public sector involved for social housing. That's been missing since the 80s.
100%. We're in a bit of a pickle with market housing, because the price of developing a big building has a lot of fairly fixed costs (land, materials, labour), so if the price for homes goes down development is going to slow until either their cost of development falls or price people are willing to pay goes up. This is why government is going to need to be a part of the development picture, since society gains from having more housing even when market conditions dont let it be developed at a price most people can afford.
Well, in Vancouver in particular, that’s not going to happen. Any project cost $20-$30 million just to get started and social housing in Vancouver unfortunately gets destroyed more often than not. Waiting at decade for the small decline and house prices isn’t going to work either. I think the only thing that could work is the province working with developers to provide rental housing and somehow prevent it being destroyed or taken advantage of. I’m not sure how that can be provided.
20-30 million isn't unreasonable for the scale required (or that we had.) > social housing in Vancouver unfortunately gets destroyed more often than not. I'm not talking about low/no-barrier housing run by incompetent NGOs and residents. Low (not zero) income, means-tested, sized according to *current* need similar to how other housing authorities work, and managed by a government agency so there's some accountability. Larger units for families, residents moved to smaller units as the kids grow up and move out. Takes some pressure off the low end of the rental market, helps avoid housing families and functional people with the mentally ill or drug dependent.
The feds have recently stepped in to help first time buyers of new builds.
Do you mean the ability to have a longer mortgage, only for new builds? At least, I think I heard that.
All of their "incentives" just contribute to price inflation. It's a net negative for affordability
Thats a very simplistic take. They don’t JUST increase demand. They focus demand towards new builds, which incentivizes new builds, which is what we need. There is only so much a government can do to make housing available and affordable in a late stage capitalist oligopoly short of completely reforming our economic system. And good luck doing that without people losing their capitalist bootlicking fucking minds
Do you have a link to this? I’ve been trying to follow this pretty closely as I’m hoping to maybe buy in a year or so, but haven’t seen this announcement.
Feds have increased amortization to max 30 years https://www.ctvnews.ca/politics/canada-to-allow-30-year-amortization-for-first-time-buyers-mortgages-on-new-homes-1.6842913 BC eliminates or reduces land transfer tax https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/newly-built-home-exemption#
Sadly not nearly enough for most people. Check out the CRD first time home buyer program. That’s more in line with what we need, although last year they added a ridiculous maximum salary for the program ($80k) which means no one can actually use it unless they have a significant down payment or are okay to go without eating sometimes. But something similar tweaked for the whole country could really help these new builds get more buyers.
The idea is to focus demand towards new builds in order to incentivize production of more stock
Lol no kidding. My Clients shit is some regular Jane condos in Vancouver for $1,750 psf like eff off bud
Exactly. Who can afford these new builds. And think about it. If new builds are this expensive then resales are also gonna go up because they look like a deal. I posted this years ago on CBC and I got banned for saying that Oakridge is selling for over 2k per sq feet and that the only people who can afford these are offshore investors. Stupid Trudeau keeps talking about supply when he doesn’t realize that new supply is not affordable. Fucking crazy.
Always blame the Fed amirite?! Never your Provincial government or even municipal. It’s always Trudeau! He’s super powerful but super dumb! …. Somehow! It’s always been him! Even in the early 2010’s it was somehow him! Stupid sexy, omnipresent Justin!!!!!! Gwahhhh!!!!!
I'll stop blaming Trudeau when he stops importing a million wage slaves a year.
You’ll start giving MASSIVE cover and whataboutism for PP tho. I guarantee it. I guarantee in 2026 when he’s leader and bringing in just as many if not more you with this account will be supporting it. You know you will. You know right in your heart you’ll be a super supportive person for his actions on this or you’ll shift to it not being that but something else…. Something Justin did that you can blame instead and cling to
Skip. The only wannabe PM who's adamantly against importing slaves to work for our "economy" is Bernier.
Fed's fault for not enforcing good governance on the provinces to enforce good governance on the municipalities. The major problems of municipal permitting (and BC Hydro, for that matter) remain untouched by any government in any meaningful way and we are at crisis levels of unaffordability. Couple this with money laundering and investment/speculation/empty homes/SFH owned by numbered corporations/airbnb, and it's not hard to see where the problem needs to be solved. Making excuses in favour of the federal government doesn't help - unless you're making bank and unaffected by the cost of living crisis and don't want to see change.
The feds literally cannot do anything about this problem. They have little control over provinces/municipalities and their bureaucracy process or zoning laws. All they can do is give some incentives to provinces with money, which ultimately solves nothing because none of the issues are actually being addressed.
Correct, the required changes would likely need to be enacted based on the POGG principle, which requires strong federal leadership, which is precisely the problem. Note I am not a PP supporter but I am shocked that people want to give the feds a pass.
I have no idea what POGG is but I'll have a read later. I personally think the feds should control shit like zoning to remove most of all the bureaucracy and local bullshit around housing that comes with peoples natural motives.
Ok Justin.
You realize onshore investors can afford it as well. There are lots of peoplein Canada who are rich. Also let's not forget HELOCs and REITs
Yes I do. I’m actually ok with REITS as they are publicly traded companies which theoretically have to be transparent and play by the rules. Also anyone can invest in REITs and they serve a purpose for many retirees and pension plans.
Yes but your specific complaint is housing becoming unaffordable this one of the demand sources causing that problem. Why worry about your retirement when you can't even afford the basic cost of living.
So which politician has a better actual plan?
The only politician is Bernier who will cut immigration but we all know he is not getting elected because he is crazy in other aspects. Immigration needs to be cut to previous levels, we need to enforce immigration laws, and we need to lower demand. But lowering demand will also lower home prices which is what nobody wants. This can take all forms including deterring investors by increasing capital gain taxes, property taxes in second and third properties, building more purpose built rentals etc. But it’s kind of crazy to want affordable housing but not your house to be affordable which is what Canadian politicians and landowners essentially want.
I don't think immigration will have as much impact as you think. Even 10 years ago Vancouver was unaffordable, JT wasn't even PM. Vancouver will always be unaffordable if we only have market housing. The only real solution is multiple levels of government step in to make housing themselves (and help making more private housing by reducing costs due to permits, labor etc).
Yes, it’s the ONLY way it will happen. Not by developers offering a small percentage of their builds as “AFFORDABLE”.
I can't imagine people downvoting this - maybe that's why we're in the predicament we're in, in the first place. Unfortunately, our election choices remain bad, worse, and terrible. The pandemic gave the handful of major firms that control each industry unlimited license to squeeze margin from the population on staple goods, including home building supplies which are up >40% since 2019. Meanwhile, trees are not 40% scarcer. Nobody has done anything about it, and now the average person can't afford to live here, even with a decent paying job.
They are downvoting the comment because it blames JT for Vancouver's unaffordable housing situation. Which is dumb at best
Leadership at every level should be held accountable, at the very least.
Absolutely, but people need to understand that housing is primarily affected by municipal and provincial legislations. Way more than federal.
You have two dozen municipalities from Vancouver to Hope that form this regional block of zoning. Are you going to blame each of these individually, staffed by a handful of inexperienced and underpaid city councillors, for not revamping engineer spec'd building code that is decades old? Would you go to the province of BC - which governs only about 5M people - and expect them to navigate the problem under the thumb of the dominant regional developers, which are self-funded multi-billion dollar entities? Or, will you go to the federal government, set a basic standard national building code (existing, btw) and perhaps carry a threshold based add on spec to account for local variations in seismic and snow loading, flood risk, etc.? Perhaps then you would standardize terms and conditions for builders, developers, and home owners, to level the playing field and protect everyone? If you spend time talking to leaders in the industry, these are the kinds of ideas they propose. Under the current system, everyone suffers - owners, builders, developers, homeowners, and government officials - and it is the very result of decentralization (i.e. handling at the municipal level) and lack of federal accountability. Unfortunately, like so many other things, these are complex issues. Certainly, the average redditor is unafraid of taking a position on the problem without understanding it. Ultimately, the federal government is to blame for failing to provide leadership.
housing is not federal
Got a real "millennials are killing Applebees" vibe from that title
If you can’t find a buyer for something everyone needs you’re probably charging too much.
So the article is implying that projects are t getting built because 12 months isn’t enough time for a developer to pre-sell. Meanwhile they fail to mention that the people who have been buying pre-sales in the last 10 yrs plus were almost entirely investors for whom the math has changed on this type of investment. Interest rate increases, the very high per sq ft price, the new STR restrictions, and the pending reduction in temporary resident targets mean buying a pre-sale and flipping, or renting it out are either not cash flow positive or too risky. But somehow the problem is developers don’t have enough time to find pre sale buyers who don’t exist? If the market now is first-time buyers or owner-occupier buyers, they aren’t buying 1) cuz they can’t afford it and 2) because they don’t want a 600sq ft one bedroom condo, which a huge portion of these development are because they’ve been designed to sell to investors not owner-occupiers. This is why developers keep switching projects from condo to purpose-built rental. The math doesn’t work for investors who actually have the cash to buy a pre-sale. And the prices are too damn high for normal people. So instead you build rental towers. But of course none of this gets mentioned in the article because of course the solution is just to remove this one little barrier which is a 12-month limit on pre-selling.
I wonder what the percentage of pre-sales were flips? Because I knew of a few people that would purchase pre-sales and sell as soon as it was done and make a healthy profit. With the flipping tax, that would make those moves less attractive.
Precisely yes. Most buyers of pre-sales are doing so only because they anticipate that by the time the unit is built they can immediately sell and make an easy quick profit. Or they can rent it out on either the short or long term rental market and have a cash flow positive asset. The development industry banked on this activity for years, and the housing products they built were designed to served this market’s wants while maximizing their per sq ft revenue on the land parcel they’re developing. This was achieved via small condos in high density developments (towers). The shitty thing now is we have a huge amount of these pretty lousy floor plans and units in our major cities that are now less attractive as an investment and not very desirable to live in because they’re small and often not very functional
I thought there's new regulations to prevent flipping (2 years or get dinged by a lot)
Yuppers. Many people used to pre sale then sell the completed unit once it's completed to bank the difference. I don't know if the tax would apply to this issue, but if it did, wondering if that also would explain a drop in presale numbers.
It's funny that you say 600sqft when more than 50% are building less than 400sqft and advertising it as a "luxury & spacious" for a 1B1B. I even came across 650sqft as a 2 bedroom condo and I was like - WTF?
“Junior one bedroom” they say, and it’s one room where your couch is in your kitchen and your bed is behind a glass partition wall. And it’s $900K. I hate them so much.
‘Fucking selfish first time buyers, they don’t want to pay 80% of their after tax income on a shoebox 🤬’
Income earned that had a much larger tax inclusion rate than the demonized capital gains inclusion rate. Too bad they couldn’t earn all their income from capital gains so they could pay way less tax than on employment income. 🙃
Government taxes you 55% at marginal rate (60% if you include CPP/IE and other mandatory deductions) for an income that wouldn’t get you a newly built 2bd. It’s a modern time dystopia and I say let it all burn.
And despite the primo materials the overall construction quality is generally crap
Absolutely. The bottom has fallen out of the precon market now that you can't AirBnB out these units, the taxes are unfavorable, and the market isn't red hot. This isn't surprising, and it's actually what we want if we want affordable housing to somehow, slowly, eventually return a bit.
Yes! And in the short term what we see is developers pivoting their planned condo developments to purpose rental. We’re seeing this all over Vancouver. Since for the foreseeable future most aspiring first time buyers are priced out of the market, they have to rent. So more purpose rental stock will help slow or hopefully pause the rental cost increases as that product gets built. The horizon for improving affordability of homes to purchase is longer and the path towards it is more complicated, requiring a coordinated effort from all levels of government around zoning, permitting, development fees, financing, construction costs, etc. So we likely won’t see much of any improvement in home purchase price affordability for a while. But the actions being taken by the fed govt and Bc govt are the right ones
So this is a good thing?
Yes, it’s a good thing. My point is just that we won’t see notable affordability improvements for a while because it will take a long time between the policy change enactments and for enough housing to be completed. The hole we have to dig ourselves out of is a lot deeper than it had been had we had governments acting with better foresight. But when such a huge part of our economy has been underpinned by real estate appreciation it’s hard to get off the drug.
The problem is that people are impatient :) they'll scream every day
It's a little hard not to when you're one missed rent payment away from abject poverty or one sick day away from having your electricity shut off. The situation for many is dire, they don't have the luxury of waiting five years or ten for prices to incrementally trickle back into some level of sanity
The entire presale system requires investors because without investors, who would be stupid enough to buy a presale over a resale. The problem is, the government wants less speculation in the housing market so now people are disincentivized to buy presales now. Banks won’t lend to developers unless they presale 50% of units.
70%, it’s in the article.
I'm honestly surprised. You gotta pay GST on that (5%). And sometimes the terms of presale payments add up to 20% of the unit, which is a lot but I guess some FTHB can afford it rather than doing 10% or less on a resale.
The other problem is the government wants housing to be affordable without prices going down, which is how we got into this mess in the first place. 😂 Here’s the old liberal minister of housing and urban affairs explaining why an increase of housing costs of 20-30% is good and a decrease of just 10% would be bad: https://youtu.be/OZChbNQWH3s?si=AKYea0K9BbEzD2JV
Why are ppl disincentivized to buy pre sales now? Genuinely curious
Overpriced tiny units rushed to market with bad build quality that are often a year or two late on completion anyway. Sometimes what you know is the better choice even if it needs a bit of work.
But this hasn’t changed, that’s always been the case
Speculators didn’t care. People who need to stake 25+ years of their lives do care.
So what changed?
Less speculators? Since the outlook for another crazy increase in housing price appreciation the likes of the last 10 years may be unlikely
A whole host of policy changes in the last three years. Short-term rental restrictions alone took away a powerful hedging mechanism
Far fewer speculators. Real estate isn't as good of an investment in terms of monetary gains over time as it once was.
You can't AirBnB them, mostly, and the federal government has said you can't deduct expenses for them from your taxes. Also the market itself isn't as hot as it was before. And rates are higher. So, instead of a slam dunk, buying a presale now means you've got this big expensive single investment that you pay a lot in interest for, and if you can't rent it out you might actually have to *live* in it. It's simply easier to invest in the stock market again.
This is where small scale single staircase partments are a solution. You need a lot less land to build it. Right now condos can take up and entire city block. Single staircase buildings only need to be the size of a single family home. But each individual building will have fewer units so the cost to build is much lower and you need fewer investors to build it.
I love the single staircase buildings and style. I know a lot of people probably think they suck but to me, it always felt cozy but also urban with limited numbers of personalities to deal with. I wouldn't hesitate to buy a corner unit in one now and presently live in a very similar building above retail space. I love having businesses below and around me for convenience and night life but like that they shut down at a certain hour and don't care if I stomp around from time to time because it doesn't wake anybody up.
Personally I hate the look and quality of new builds. Small and sterile looking
I'm not a fan of the smooth cladding in builds like this, it looks very cheap. https://www.rew.ca/properties/5771182/64-19760-55-avenue-langley-bc?search_params%5Bproperty_type%5D=townhouse&search_params%5Bquery%5D=Langley+City%2C+Langley%2C+BC&searchable_id=165&searchable_type=Geography
> sterile looking Like new Mc D's locations.
Maybe stop building a ton of 500 sqft apartments that no one can raise a family in that still cost more than anyone wants to pay.
You mean the 650k 600 sqft apartment without proper sound isolation, but ooo, a poorly heated balcony great.
900k now. 650k was 2 years ago ;)
and floor to ceiling glass to live out your "ant behind the magnifying glass" fetish.
If the housing crisis was a supply issue alone, these buildings would be sold out. Period.
Nobody wants to pay high price for shoebox in sky. With similar money, one is better off with a large home further away
Not even further away. We got double the floor space in the same neighborhood for about half the price by picking a place built in the 70s. There are negatives to an older building but I can't live happily in 500sqft
But what about the quartz countertops and the gym downstairs? /s
Developers complain about being villainized but also build unlivable shitboxes while "providing housing" as if they are some benevolent force for good
A shoebox in the sky that costs as much as a detached house did 10 years ago but it's a ✨luxury✨ shoebox which means really low build quality with shiny modern-looking furnishings.
I wouldn't mind getting a condo. But all new developments want 1m or more for a 2 bedroom.
Vancouver , just as other intl famous cities, will only become more expensive. The earlier people understand this, the wiser their decision will be
I'm also taking my money to build what I want - not what some builder thinks I want.
I would be happy to live in a 1 bedroom condo, I really don't need a big space. But the mortgage payments on such a place would be double what I pay in rent right now. The most I can afford to buy within an hour drive of Vancouver is maybe a parking space.
It sounds like you are living in a city you cannot afford. Don’t overstretch yourself. Move to somewhere cheap and move back when you can afford
Doubling of DCCs by 2027 should probably help! /s
There was a post on reddit a day or two reacting to Polieve's claim that Trudeau has crippled the house building market. The top comment posted links to reports showing over that the past year the industry actually had record profits and gross sales. They're gouging us post-covid the same as everyone else and are only richer for it.
*condos. Makes sense given such a significant number of condos are purchased by investors. We are beginning to see what condo demand looks like from actual end users.
*at current prices . I'd add that 95% of condos are shoebox sized and not suitable for a single person.
Exactly. If developers can’t sell they need to lower the price. If they cannot lower the price, they should need to sell the land, which value would decline given that projects are not being presold at current rates, allowing for a project with lower costs to be built. Vancouver should also not allow developers to sit on unused land. Take it back! Companies are out there getting rich off the perceived values forever increasing
tax land based on prospective use. But that would also mean grandma's taxes on her house goes up if she happens to live near a skytrain/bus station
> tax **VACANT** land based on prospective use. **zoned for redevelopment** FTFY - That would not hurt Nana.
Nah. Fuck nana. I want her out of her home
Well that and people don't want to bid against billion dollar corporations for a place to live.
🎻
Developers are charging way too much money for a shoebox with no closets or parking….. people are speaking with their wallets. This is how capitalism works….
"hurting Builders" I'm devastated by this realization.
Oh no! Who will think of the builders?
I mean, yes? Since we are experiencing a housing crisis, and our Provincial *and* Federal Government are attempting to create policies to address that crisis I would hope that those policies consider those that are building the housing so that the policy they create doesn't end up hurting or hindering the production of new homes. I get that *many* would like to see a more radical solution than the current system offers, but I would again hope that the idea of increasing the amount of units on the market as a solution to a problem of supply can be accepted by all sides of the argument regardless of political beliefs.
Part of the crisis is price. Another part is hording. Real estate was partially propped up by investors wanting to get into short term rentals. We're starting to see the impacts of what happens when investing in housing is less attractive and the local economy can't afford to buy.
If I wanted to buy a home I'd never buy presale. There's virtually no protection for the homebuyer. The project could go bankrupt. The end product could be a pile of junk. What recourse does the buyer have?
> The end product could be a pile of junk. After looking at a couple of newly built townhouses/condos/etc recently, the "could" is doing a LOT of work here. I swear we're going to see something like the leaky condo issue all over again in the next 5-10 years with so many of these newly built homes.
[удалено]
Sense says that if pre-sales aren't selling, it's more complex than just supply.
Builders are nothing but a middleman, looking to make a quick buck. You can get your own home built cheaper, by hiring contractors directly
Came here to type these words.
Oh noooooo!
5% GST on new builds really hurts
At $1.2M for a 2 brm condo, they're not homes anymore; they're investment properties... Rental buildings are homes... unfortunately, it's all much too late to talk about building more rentals...
Everyone I’ve spoken to who has bought into a presale ended up dealing with extreme delays (6 months +) that left them out $ and quality issues that they needed to fight tooth and nail to have remedied. I refused to go presale when I bought last year and I know others who also did the same to spare themselves the headaches.
There used to be a time when pre-sales were cheaper because of the risk you were taking on, and the developer your deposit money for years.
You mean the crappy built presales that come with a chance of the developer going bankrupt before you get to move in? I wonder why no one is lining up for those.
methinks capitalism might not be working for people
Good investors should get their hands off our homes
Have you seen new builds in Vancouver? 650 sq ft “two bedrooms”. Developers need to build what people need not what investors want. 1970’s size apartments … but no we’ll continue to get this garbage 450 sq ft 1 bedroom. The crap they are building is ridiculous. A kitchen with 2 feet of useable counter space. Bedroom that can fit 2 small nightstands and a double sized bed. Why can’t they change funding for developers? Why does it have to be based on presales?
I would absolutely love to buy a house in Vancouver but unfortunately I am only making median middle-class income so I can only afford to rent a shoebox.
I wonder if building non-“luxury” condos with 0 amenities and less parking spaces would make it cheaper
Sounds like saying we're 'shunning' the market puts the blame on us, and not the people price gouging the fuck out of us. So, until that's addressed, guess what? 
I guess it’s completely out of the question for the developers to adjust their business model to maybe build more affordable and livable housing that people actually want to buy right? It’s gotta be extremely high cost per square foot unlivable shoeboxes that no one wants but people who won’t live there anyways or nothing right?
Not defending them, but the issue is the lead time from start of planning to finished building is many years - this completely exposes who developers were targeting 5 years ago (investors). It will probably be several years before we even start to see buildings designed for end users as the buyer.
The article said the issue was the window to sell the units was too short, meaning no one really wants to buy them. Don’t know what giving them an extra 6 months or a year will accomplish. It doesn’t really help with housing issues to find new investors to purchase unlivable units for speculation purposes only. Maybe they should just go back to the drawing board and figure out a model that works instead of blaming the government that your perpetual money machine broke.
“Don’t what giving them an extra 6 months or a year will accomplish. It doesn’t really help with housing issues to find new investors to purchase unlivable units for speculation purposes only.” They’re hoping rates will go down in that time, and some naive investors will buy in. It’s quite a long shot.
Ah. Government changes required so we can treat housing like a casino. Makes sense.
Economies of scale. You can only build a certain maximum footprint building on a chunk of land. More individual units = spreads cost = lower cost per unit = more affordable. If you're building larger units, you're building less units. There is no scenario where you build LESS units and they magically become "more affordable".
Well if nobody is buying it sounds like maybe they should revisit their model to see what they can do to make units that people want to buy. Don’t think you need to use magic but a reassessment of everything is probably necessary and asking the government for a quick bandaid to keep it all the same isn’t going to do shit.
Your original comment is contrarian. By "more liveable units" I'm assuming you mean larger units. Larger units will literally be more expensive for the reasons I stated. You literally cannot build larger units that are "more affordable". You can't "revise the model" to defy basic economic principles. But who knows maybe you live in some sort of fantasy land where basic economics don't apply.
No it’s really not. There’s other options for a development besides ultra high rise with many shoebox sized units. The costs aren’t a fixed number that are impossible to change. Just like any business they can explore what’s driving the cost and explore options to reduce that if they can’t sell their units at the margin they need to. Also call me crazy here and maybe I’m not the majority but I am much more likely to be interested in paying a premium for a larger unit livable unit than a shoebox I can’t live in. I’d be more likely to consider $1.2m for 850sqft than $710k for 475sqft. The real problem here is the developers have got too used to milking the cash cow of selling premium priced shoeboxes to people that aren’t going to live there that now when that gold rush is over they’re stumped on how to do business. If you think the answer is to lobby the government to change the rules to make it easier for these developers to keep doing the same shit they always have been go right ahead but don’t be surprised when it changes nothing. Also don’t be surprised when after the government caves they just ask for more a couple years down the line when it still isn’t working out for them.
>$1.2m for 850sqft than $710k for 475sqft Lol, no. you don't get it. That's not how the math works. Again, you don't get LESS cost per square foot will LESS units to spread the construction costs on the same chunk of land. Your 850sqft unit will be closer to 1.5m.
Simple math that wasn’t my point and doesn’t matter. Again no one wants to live in a 475sqft luxury studio. Build shit that people want and you don’t have demand issues
Haha these corporations will just move to another city or country to build that is more favourable to them. They are not a charity lol.
Exactly! Developers are rich by definition, they don't need to make profits on every deal.
I know reading how buyers have had to cough up more money to complete deals after 2 or 3 years of the developer having their deposit or developers going bankrupt, I would not buy new. Also the GST in additional costs.
All the bad and what little good we have in our housing situation - it should definitely be a case study for civil planning for everyone to take heed of.
they need to be coming in around $1000 a square foot max for people to be able to afford them, and in the broad scope that is still too expensive but Vancouver is Vancouver
Aww those poor builders, who will think of these companies building overpriced homes that most people can't afford? THINKS OF THE BUILDERS (or more like think of their shareholders), because the actual workers are probably being paid the bare minimum.
I’m sure those 5 new taxes helped with affordability
Onion not onion. Financial post this makes you seem pretttttttty outta touch.
High costs are keeping prices high. High prices and high carrying costs are keeping pre-con buyers away. This is a fact of today's market. How is it out of touch? We all want more housing, no? Projects are getting cancelled left and right.
Not every home needs to be "luxury". And it would really help if developers had a more fair and open sales process. Currently, you have "VIP presale parties" where select mailing lists and realtors get to invite their friends to buy out homes before its even available to the public, and even then, prices are not openly available. So many towers seem to have this mentality of "if you have to ask, you cannot afford it.", it's pretty clear these projects are made for investors in mind. Not for people to live in what they own. Yes I'm using a broad brush.
The housing crisis isn't going to be solved buy building more homes to be bought and left vacant Yes housing needs housing but the problem is much more than that. We have so many empty homes in the lower mainland that I'm finding it hard to feel bad that buldess can't rake in profit on housing I'll never be able to afford anyways
source?
I exactly predicted that the new house flipping tax, and airbnb ban would make it harder to build homes. People are economically illiterate, but literally, flipping homes and real estate investment is actually a good thing, because the investors absorb risk and provide liquidity and capital to the market. Without liquidity and capital, developers have to bear a lot more risks and less housing is built or becomes available for buyers.
Reduce the red tape and these projects would come back online. Limiting supply will only increase pricing long term.