New condo market in Greater Vancouver in dire shape

In a first amid what real estate experts say is a Vancouver-area condo market meltdown, a long-established development company has terminated its presales efforts for a major project and returned purchasers’ deposits.

Karen West, vice-president for marketing and sales with Boffo Developments Ltd., said the company launched the first of what is meant to be a four-tower, 1,200-unit development last July in the hopes that the market was starting to improve as interest rates were slowly coming down.

Only 44 units of the 318 in the first tower sold between July and December and then sales just dropped off completely in the new year, so the company reluctantly decided to pause the project, return deposits with interest, and wait for better conditions, said Ms. West.

Normally, Boffo, in business for more than 50 years, would see about 90 sales in the first three months of marketing, she said.

“We knew we were taking a risk when we decided to proceed last summer. We build for the end user; we don’t rely on investors. It’s always worked well, but I don’t think we could have anticipated the market being as difficult as it has been,” Ms. West said.

Industry experts say this kind of presales withdrawal in this challenging cycle is a significant red flag, as the industry struggles with the after-effects of COVID, climbing interest rates and uncertainty emanating from the U.S.

“It’s like this cascading waterfall of bad news,” said Ryan Berlin, chief intelligence officer at Rennie Marketing, one of Greater Vancouver’s major presale marketing companies.

Rennie laid of 25 per cent of its staff late last week and Mr. Berlin said many people are not expecting the market to start functioning anywhere near normal for two years.

Central Credit Union economist Brian Yu said Monday the industry is in recession.

In metropolitan Vancouver, there are currently 2,500 condo units completed and unsold and that number could climb to 3,700 by the end of the year, said Mr. Berlin.

There is no agency that collects statistics about how many presale buyers are not completing their purchases. But Mr. Berlin said his company is seeing a lot of presale buyers adding family members to their contracts as a way of qualifying for mortgages.

One problem many buyers are having is that their units are being assessed at less than what they paid for them, which means banks are reducing the amount they will lend and buyers are having to make up the difference with additional cash of their own, said Mr. Berlin.

As developers reluctantly contemplate lowering prices, that will add to the pain, since those lowered prices will lead to lower assessments overall for everyone with similar units.

The situation is bad enough that the B.C. government agency that monitors presale condo contracts now says that it is starting to collect new data to get a better picture of what is going on.

The BC Financial Services Authority “does not have sales-related data for presale developments but is monitoring the challenging environment impacting the development industry as a consequence of economic uncertainty and rising construction costs,” said an e-mailed statement provided to The Globe and Mail.

The authority recently changed the rules to allow developers of larger projects to have an extended marketing period of 18 months, rather than the current year that was the limit before, because of the escalating bad conditions in the residential-construction industry.

Boffo chose not to apply for that, saying the trend line didn’t make it seem like more time was going to improve things.

“We’re one of the more fortunate groups that haven’t started construction,” said Ms. West. “To protect the master plan, we are going to wait and see what things look like later this year.”

That was bittersweet news for buyers, each of whom Ms. West contacted personally.

“Of course I was disappointed,” said Nicole Robson, a 51-year-old Burnaby single-detached homeowner who was counting on being able to move in sometime in 2028. “But it was handled in the best way, with a lot of integrity.”

She got the call from Boffo Wednesday almost two weeks ago and had her deposit with interest back that Saturday – a relief since she had borrowed money for the more than six-figure deposits she had paid out to that date.

Ms. Robson said she’s planning to wait for Boffo to restart the project, where she’s been promised the same two-bedroom, 1,300-square-foot unit at the same price – or lower, if that’s what the state of real estate is when the first Bassano tower goes ahead.

That puts her in a better place than many other presale condo buyers in Vancouver and Toronto who are struggling to figure out how to come up with larger down payments on their lower-value condos as completion nears.

Some are simply walking away from very large initial deposits.

That is prompting some pushback from developers. In Toronto, developers have initiated more than a hundred lawsuits in efforts to get their full purchase price from presale buyers.

According to statistics available in Toronto, there were 23,918 in the pipeline or completed in the first quarter of 2025 for the Toronto-Hamilton area. Of those, about 1,900 were completed and ready to be moved into. It’s expected that number will rise to 2,400 by the end of the year.

Prices have declined 10 per cent to $1,524 a square foot compared to the peak in 2022, according to Bullpen Research and Consulting.

Vancouver prices have also come down. Nothing in downtown Vancouver, currently the most expensive part of the region, can get more than $1,800 a square foot, said Mr. Berlin.

At the pre-COVID peak, developers were sometimes asking up to $3,000 a square foot for luxury condos downtown.

For more than a year, many developers had been trying to entice buyers by giving them all kinds of perks – from free beer for months to lower mortgage rates from a third-party financial institution to $20,000 decorating budgets.

One of the province’s largest developers, Anthem Properties Group, just announced a new “homeownership accelerator” initiative to have its team members work with any buyer to figure out any possible strategy to enable them to purchase: rent-to-own agreements for both existing tenants and new buyers, lower down payments, flexibility in the deposit timing, whatever it takes.

“People are sitting on the sidelines. … So we came up with a program that offers the most flexibility to the buyer,” said Anthem’s vice-president for marketing, Dennis Kim.