Renderings of the 69-unit HEM by Vancouver-based boutique developer Hudson Projects.Hudson Projects
Vancouver’s condo market appears dead, with thousands of completed units sitting unsold, and even large, established developers having to cancel projects because the pool of available buyers has dried up.
But there are a few in the industry who say they’ve found a way to adapt to a new market reality – and even launch condo presales this year.
Chard Development, active throughout the Lower Mainland and Victoria for 30 years, cancelled its 131-unit Earl condo project in Norquay Village at 2700 Kingsway last year. The developer returned deposits to buyers and turned the condo into a rental building, with government assistance.
Chard is on track to finish construction of the Earl by the end of next year, said Chard president and chief executive officer, Byron Chard.
Mr. Chard said they had launched presales in 2023, when interest rates were high. It is the first time they have had to cancel a project, he said. Now, the company is focusing on building rental.
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He said financial assistance from a Canada Mortgage and Housing Corporation program was “critical” in their ability to turn the Earl into a rental building. Mr. Chard said the City of Vancouver also offered breaks on fees.
“The key for us was we saw the opportunity to pivot,” he said. “Our core mandate is to deliver homes. And that’s what we’re still able to do because of the government.”
Whether a project can launch in this market depends on the developer’s business model, said Mr. Chard.
“We are still seeing success in the market in certain segments because of how some of the developers are financing their projects.”
A key piece is construction financing, which has typically required selling around 60 to 70 per cent of the units within a certain time period. If a developer can’t meet that deadline, they probably can’t get the financing to build.
Hudson Projects launched the 38-unit Naimo in May and within three months it was 65 per cent sold.Hudson Projects
Ben Amzaleg, principal of Framework Marketing, has two east side Vancouver condo projects in presales this year, including Naimo on Nanaimo Avenue near East 6th Avenue, and the 69-unit HEM, near East Hastings Street and Nanaimo Avenue. Both projects are by boutique developer Hudson Projects. They launched the 38-unit Naimo in May and within three months it was 65 per cent sold, which means the developer met its presale requirement, Mr. Amzaleg said. It’s now under construction and about 75 per cent sold.
Five years ago, that 65 per cent would not have been considered a great result. In today’s market, it’s “a great success story,” said Mr. Amzaleg.
“The East Vancouver market is very price-driven and design-driven,” he said. “There are people that are looking to buy real estate. The challenge is these buyers are not seeing tremendous value in the current presale market.”
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To answer that cautious demand, Hudson has designed units of around 500 square feet that are priced at around $1,200 a square foot, or $600,000. Mr. Amzaleg said he knows from experience that anything above $650,000 takes a long time to sell. The problem is that some developers aren’t listening to the market, Mr. Amzaleg said.
Another key to launching a project in this bleak climate is that the lender needs to be flexible.
Because this year is even worse than last year, Mr. Amzaleg said it was crucial to allow 10 per cent down payments at HEM instead of the usual 15 or 20 per cent.
“They’re willing to take more risk on the lending side just so the project can get off the ground.”
Rendering of Naimo on Nanaimo Avenue near East 6th Avenue by Vancouver-based boutique developer Hudson Projects.Hudson Projects
For HEM, the strategy is to sell the first third of the building below market, another third of the units at market, and the remaining third in the future, at what’s expected to be a higher price point. The below-market units are starting at $480,000.
“They’re not going to make a tremendous amount of return like they used to make back in the day,” he said of developers. “But they can still continue hiring and employing their construction, and they’re able to get their machine going.
“Ideally, they would sell all of it at that high price per square foot, and they’re able to make a killing–but they can’t do that any more.”
In Surrey, Apcon Group is about to launch presales for its 133-unit Interchange condo project, two five-storey buildings with starting prices in the mid $300,000s.
Marketing manager Bairaj Rai said the biggest shift is marketing to people who intend to live in the units instead of investors, which used to represent 50 per cent of condo purchasers in the Vancouver area. For their market in Surrey, that means bigger units at attractive price points. She said that five years ago, the units would have “absolutely” been smaller, and more expensive.
“It’s really just tapping into a much broader demographic by having everybody in mind and at the forefront with a thoughtful design process,” said Ms. Rai.
As for why other developers are putting projects on hold, she said not everyone can change product type or unit size.
“It really does vary from developer to developer.”
Developer Gordon Wylie, president of NorthStar, launched presales for a 102-unit Port Coquitlam project called Livy this past summer, starting at $299,900 for a small studio. He’d purchased the six-storey property as a court-ordered sale. Thirty of the units have been priced below $399,900, targeting first-time buyers.
In an e-mail, Mr. Wylie said the project “had an excellent launch,” with 40 per cent sold over four months.
“As such, Livy is a significant outlier in the marketplace. We will continue to sell this fall, and construction is planned to commence in [the second quarter of] 2026.”
Mr. Wylie said NorthStar had reconfigured the design of the building for smaller, “more attainable” homes and added a lot of amenities, including a fitness studio, thermal hydrotherapy wellness centre with hot and cold plunge pools and infrared sauna, virtual golf and a sports simulator.
“Buyers today are careful, but they still want connection, convenience and value,” he said.
It’s a far different climate from those days when people stood in line to purchase a presale, said Mr. Amzaleg. Back then, the presale was a better deal than an existing unit and buyers made a lot of money flipping them before they even completed. Today, buyers can walk across the street and get a better deal on a two-year-old unit.
But Mr. Amzaleg said the downturn is not going to last forever. Vancouver’s presale condo market will heat up again.
“There are better days ahead,” he said. “It’s not great now, but in the future, we believe that the market will come back and there’s going to be another one of these gold rushes. It’s inevitable, because all of these people that are not buying will eventually buy.
“It’s not if. It’s when.”