Crisis & Revitalization of the Real Estate/Construction Industry in BC
From Toronto to Vancouver, the headlines tell a confusing story: thousands of unsold condos, stalled projects, and cancelled developments. To some, it feels like Canada finally has enough housing — or maybe even too much.
But a recent letter to Prime Minister Mark Carney and Housing Minister Gregor Robertson from leading B.C. developers warns that what we’re seeing today is misleading. The real crisis, they argue, is just beginning — and it’s about what won’t get built next.
Signed by well-known names like Beedie Living, Polygon, Amacon, Westbank, and Cressey, the letter makes one central point:
“In the absence of foreign investors, fewer projects will meet presale financing thresholds, suppressing supply delivery, which serves no one in a housing crisis as projects will not start.”
And that’s the fear: if construction starts drop off now, two to three years from today we may not have enough homes to meet demand — just as rates settle and buyers return.
The Core Argument: Foreign Capital Enables Future Supply
New condo construction in Canada relies heavily on presales to secure financing. Those presales, especially in early stages, are often driven by investors — including foreign ones. As the letter titled 'Crisis & Revitalization of the Real Estate/Construction Industry in BC' explains:
“New condo development requires presales to meet financing thresholds, part of which relies on investor-focused buyers. Closer to occupancy, sales typically shift more toward owner-occupiers.”
The current federal ban on foreign residential real estate purchases, extended to 2027, has effectively cut off a key capital stream. While that ban was introduced to address affordability, developers argue it’s now having the opposite effect: slowing construction and shrinking future supply.
The letter acknowledges the need for limits, but suggests a new approach — pointing to Australia’s 2024 policy, which restricts foreign purchases of existing homes but permits investment in new builds and presales.
“While we understand that the ban was implemented to protect housing supply for Canadians, it has unfortunately impacted the construction industry.”
But Is This Really a Supply Problem — Or a Product Problem?
Here’s where the conversation gets complicated.
Some might argue that the slowdown in presales isn't just about financing — it’s about what’s being built. Much of the inventory that’s sitting unsold today is geared toward investors: small, high-cost condos, or ultra luxury spaces that don’t meet the needs or budgets of local families.
In that light, this slowdown could be seen less as a funding crisis and more as a mismatch between product and end-user demand. If more developers had focused on building homes for local owner-occupiers — larger units, more affordable price points — perhaps the market wouldn’t be stalling.
From that perspective, calls for foreign capital could feel like a plea to preserve an outdated business model.
So Who’s Right?
It may not be a matter of right or wrong — but of timing.
Yes, there’s currently an oversupply of investor-grade condos. And yes, some developers may have misread where local demand was headed. But the concern raised in the letter is about two years from now — when projects that didn’t start in 2024 or 2025 would have been delivering new homes.
If the development pipeline stays dry, today’s surplus could quickly flip into tomorrow’s shortage, particularly if immigration targets remain high and borrowing costs stabilize.
“Suppressing supply delivery… serves no one in a housing crisis.”
What This Means for Buyers
If you’re in the market now, you may benefit from lower prices and more negotiating power. But if you’re planning to buy in 2-3 years, the supply you’ll be choosing from is already being determined today.
And that’s the tension developers are pointing to: without early capital — including some from foreign investors — there may simply not be enough housing under construction now to meet future demand.
The North Shore
In North and West Vancouver, developers here have historically built more for locals than for overseas investors. The result? Stronger sell-through rates, even in a slower market.
Projects have typically focused on end-user needs — homes with practical layouts, more livable square footage, and pricing strategies that reflect local demand.
That said, even here, the climate is shifting. We’ve seen some projects delayed or put on hold in recent months.
If you’re evaluating a new presale project, it’s more important than ever to understand the unit mix and market fit.
We break down what to look for in a presale deal in our guide:
Investing in Presale Homes on the North Shore: What Buyers Should Know
A Complex Problem, and a Local Opportunity
At the national level, the debate over foreign investment and housing supply is far from settled. The concerns raised in the developers' letter are valid — but so is the criticism that some parts of the market have been building the wrong product.
On the North Shore, we've seen developers take a more locally focused approach, and that’s led to stronger fundamentals. Still, with some projects now pausing, it’s a reminder that not every presale will move forward — and not every unit is priced or planned for long-term success.
In this uncertain environment, it’s more important than ever to evaluate each opportunity carefully. Timing, product mix, developer track record — it all matters.
If you're thinking about a presale purchase, we're here to help you make sense of it — with grounded, local insight and no pressure.
Let’s make sure your next move fits the market and your goals.