Every so often, the local market takes a breath, usually driven by economic or policy-related factors such as the 2008/09 financial crisis, the 2018/19 tax-related slowdown (including the mortgage stress test), and the shift that began in 2022, driven by the fastest interest rate hikes in history.
This leads to demand being suppressed for a short period of time while buyers figure out their next move. Inventory grows, and sellers and new construction developers adjust accordingly. Prices drop, incentives grow, supply increases, and overall negotiating power strongly favours buyers.
For those looking for new development homes, the incentives are the strongest, including no GST and PTT (tax), saving you thousands.
Low-rise wood-frame condos and townhomes will make up most new development sales over the short to medium term, as these housing types are most suited for end-users and first-time buyers. They’re also located in more family-driven neighbourhoods and communities, making them the best option for first-time homebuyers and young families looking to establish roots.
However, areas that support the development of this housing type are quite limited. Coupled with the fact that fewer developers are breaking ground at the moment, home prices in both these sectors will rise significantly over the coming years.
For those who buy new development today, everyone with actual skin in the game (such as those in the homebuilding industry) can guarantee that the home being built today will be the cheapest you’ll ever be able to buy it. Waiting an additional 2–3 years will only result in further construction costs and supply-demand pressures being passed on to the new homeowner.
Developers can’t break ground at today’s prices, so they’ll delay projects until the market catches up, which, as history shows, typically happens once demand begins to outpace supply again.
The high-rise condo presale market is at a complete standstill, which will ultimately lead to fewer new homes being built in the coming years. In areas where high-rise is the dominant form of development (SkyTrain-oriented centres such as Metrotown, Brentwood, Coquitlam Town Centre, Port Moody, and Surrey City Centre), most new high-rise product is now being revised into rental buildings, further decreasing the amount of ownership supply.
Delayed project launches, industry-wide development staff layoffs, rising construction costs, and large-scale developments being revised to rental all point to fewer ownership opportunities in the future. Understanding this breadth of issues is what makes today the best time and prices you’ll ever end up buying at.
Contrary to public opinion. Again, just my own personal opinion.
