As I reflect on all the 'noise' about housing affordability and whether Mark Carney should remove the ban on foreign buyers, I decided to review what I and others were predicting would happen in 2025. In late 2024, I wrote my annual outlook article for the Vancouver Sun https://vancouversun.com/homes/michael-geller-b-c-real-estate-forecast-for-the-year-ahead
In it, I noted that while many are rushing to buy bitcoin at unprecendented prices few are buying presale condominiums. I suggested that in 2025, presale programs will get underway for new condominium projects throughout the region. Smart developers will be designing these projects to appeal primarily to “end-users” rather than investors.
Well, I was wrong. The market has continued to be so soft that few new presale condominium projects have got underway for either investors or end-users are buying. This has led to considerable discussion as to what needs to be done to spur the market. One consideration raised in another year end conversation with Kerry Gold who writes for the Globe and Mail and Storeys was the impact of the ban on foreign buyers for both the rental and ownership markets.
"Developer and consultant Michael Geller said there is not one overall market for Vancouver this coming year. Rather, the region will be divided into sub-markets, each with its own unique flavour. Developers will have to respond to diverse sub-markets.
“What applies to East Vancouver may not apply to Burnaby or Richmond,” he said.
Geller said that the experienced players in the development industry will target end-users such as first-time buyers, move-up buyers, and empty-nesters. The investor is no longer the focus of a presale program, he said. The glut of purpose-built rental units coming online, combined with restrictions around foreign buyers and short-term rental platforms has taken the steam out of the investor-driven presale condo market.
And the federal foreign buyer ban, extended to last until 2027, may have had an impact on Vancouver’s pricey luxury market, both rental and ownership.
With price-sensitive demand, Geller said smart developers and architects will get more creative about their designs.
“Consideration should be given to designing projects containing suites that could appeal to those interested in co-purchasing,” he said. “These could include one-bedroom units where the living room can become a separate sleeping room at night and two-bedroom units with two similarly sized ensuite bedrooms.”
Over the next seven months, vigourous discussion continued on how best to address housing affordability and whether removing the ban on foreign buyers might be an important action. This led to what were called 'dueling letters' and other debate, some of which is addressed in the following blogposts.
