Vancouver’s real estate market adjusts to the new normal
Vancouver Special to The Globe and Mail Published 4 hours ago
Lana Gudlaugson’s late mother’s apartment in Vancouver’s Fairview Slopes had been a decent source of rental income for at least 20 years.
After their mother died, Ms. Gudlaugson and her siblings didn’t want to be landlords, so they decided to sell despite a market downturn for condos.
“We were dissolving her holding company that owned the unit, so we decided we would sell it, rather than carry on, partly because the income would have to be split three ways, so it didn’t seem worth it to hold on,” said Ms. Gudlaugson. “But it was maybe not the best time to sell.”
They listed for $570,000, close to the 550-square-foot unit’s assessed value of $568,000. After three open houses that were attended by around 20 people, they had no offers. They reduced the price to $549,000 and settled on a negotiated offer of $530,000.
“It took three or four weeks. I was getting worried,” Ms. Gudlaugson said. “Worried enough that I accepted the first offer.”
It could have sold quicker if she’d taken her realtor’s advice and listed initially for $549,000. But like a lot of sellers, there is that reluctance to go below assessed value. “Because we didn’t have offers and not a huge amount of interest, we decided to go with $530,000. We definitely all wanted a little more out of it, but on the other hand, my mom paid $200,000 for it 20 years ago and put $80,000 into it for the building envelope.
“And because it’s an inherited property also, whatever we made on it is incredible, because it wasn’t our money that was invested.”
Her realtor, Jacob Krause, said the condo sold because it’s in a prime location and condos in desirable neighbourhoods are selling. Overall, condos remain “slightly harder to sell,” and townhouses, duplexes and detached houses are easier, especially if turnkey, he said. Because sellers are slowly realizing that their homes are no longer worth peak prices, or maybe even assessed value, the gap between expectation and reality is closing, he said.
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“From my perspective, we’ve been much busier this spring than we were last year,” said Mr. Krause. “Buyers seem tired of sitting on the sidelines, and sentiment is starting to shift. At the same time, sellers have adjusted to the current market and are becoming more realistic.
“I do feel the market is picking up.”
Realtor Ian Watt said properties are selling, but the investor buyer, once the prime mover in real estate sales, no longer exists. The condo buyers of 2026 are choosy.
“It’s definitely slower, and the median price is slightly lower,” said Mr. Watt. “The only way to make money is if you bought 15 years ago.”
He has a condo for sale in Surrey. The seller bought it new three years ago for $599,000 plus GST. She’s selling it priced at $549,000.
And the price of owning a condo is getting higher, he added.
“Getting money is more difficult; getting a mortgage is not as easy as it was,” said Mr. Watt. “Rates are higher, so you don’t qualify for as much. Maintenance fees used to be 30 cents a square foot, and now we are looking at 60 to 70 cents. So, if you have 1,000 square feet, that’s an extra $700 you have to pay, plus taxes, plus insurance. So, not even including a mortgage, you are looking at $1,200 to $1,500 in fees.
“So, people won’t pay that price you’re asking. And I don’t think they’re confident that the prices are going up any time soon.”
According to Greater Vancouver Realtors, condo sales were down seven per cent year over year while detached houses moved up one per cent. North Vancouver and East Vancouver apartment sales did see increases relative to last year, according to chief economist Andrew Lis.
If resale condos are sluggish, new condo inventory is barely budging. The Canada Mortgage and Housing Corporation data for March showed that 3,195 newly built condos were sitting on the market in Metro Vancouver. Of those new units in Burnaby and Vancouver, 81 per cent were priced over $1-million. New inventory for April grew 11 per cent, with 3,554 unabsorbed condos, according to associate professor and director of Simon Fraser University’s City Program, Andy Yan, who’s been keeping tabs on the CMHC raw data. The definition of “unabsorbed” is units without owners. He pointed out that new unsold condos on the market are exempt from the Empty Homes Tax.
Those condos priced over $1-million dipped slightly to 79 per cent in Vancouver and 80 per cent in Burnaby, which could mean some of those condos had been purchased. But it’s possible that developers lowered the prices, said Prof. Yan.
“Unabsorbed units in Metro Vancouver are reaching the highest numbers that the region has seen since the mid-1990s.”
Developer Kevin Layden, president of the developer Wesbild, said it’s a common misperception that condo prices became expensive because of developer profit margins. He said that prices had escalated largely due to unprecedented fee increases by municipalities in the last decade, compounded by growing construction costs, complex building codes, and other factors. Municipalities charge developers flat fees to help pay for infrastructure such as roads, parks, and water. But the charges add significantly to the cost of development and have grown over the years.
Mr. Layden explained cities have been using these charges/increased price to help fund a lot of their programs.
“If you take the average $1.1-million city of Vancouver condo, the developer may make $120,000, but the city will get, and the municipalities or Metro Vancouver and the province will get $325,000. Basically, the developers have been the scapegoats for politicians,” he said.
If the revenue is down, Mr. Layden said costs have to be cut.
“You have to reduce some of your expectations for rec centres or whatever because you just don’t have the funds to do it.”
While you can raise development cost charges, he said “at the end of the day, you’ll get 100 per cent of zero if the project doesn’t go forward.”
