Development + Policy Shift to Watch
There’s been a lot of conversation lately around the pre-sale market the reality is, the math just hasn’t been mathing. The cost to build new homes has outpaced what buyers are willing to pay, which has led to a slowdown in new construction.
In Ontario, we’re now seeing government step in. A recent $1.3B public-private partnership was launched to buy up unsold condo inventory and convert it into rental housing, essentially helping developers clear units and keep projects moving.
There’s also been discussion around additional incentives, including tax relief on new homes, aimed at stimulating demand and supporting the development pipeline.
Here in BC, developers have been pushing for similar support. And while opinions will vary on whether that should happen, what’s worth noting is the ripple effect, construction is a major driver of jobs across the country, and when projects stall, it impacts far more than just housing supply.
Right now, presale simply isn’t competing with resale. Between construction costs, financing, and significant municipal fees, it’s difficult for developers to price projects in a way that works in today’s market. And when the math doesn’t work, projects don’t move forward.
If this continues, it raises a bigger question what does supply look like down the road from now if we’re not building? We’ve seen this pattern before: slower construction followed by inventory shortages and upward pressure on resale prices.
One other fun piece to keep in mind, the foreign buyer ban is currently set to (quietly?) expire in January 2027. Whether that opens the door (even partially) to new construction demand is still unknown, but it’s another variable in the soup.
Will BC follow Ontario’s lead, or let the market correct itself?
👉 For a deeper dive:
https://betterdwelling.com/ontario-launches-1-3b-toronto-condo-developer-bailout-warns-bank/