If you’re wondering why fewer projects are moving forward in Vancouver, the answer goes deeper than interest rates or demand.

It comes down to cost structure—and more specifically, government-driven costs.

The Big Number

Today, government-related costs make up roughly 20% to 35% of total development costs, with some projects approaching 40% or more.

That’s a significant shift from previous cycles.

Breaking Down the Costs

Direct Charges

These are the most visible:

• DCLs

• CACs

• DCCs

• Permits

In many cases, these alone can exceed $100,000 per unit.

Regulation-Driven Soft Costs

These include:

• Design and engineering

• Rezoning processes

• Energy compliance

• Professional fees

These costs have steadily increased over the past decade.

The Cost of Time

Delays act like a hidden tax:

• Carrying costs increase

• Inflation impacts construction

• Project timelines stretch

Time is now one of the biggest financial risks in development.

Why It Feels Worse Today

Three key pressures:

1. Front-loaded costs
Developers pay before revenue is realized

2. Uncertainty
Rezoning and approvals are unpredictable

3. Compounding pressure
Higher rates + longer timelines + higher fees

The Key Insight

Government costs are now effectively a second land cost.

This changes how projects are evaluated:

• If costs rise, land value must adjust

• If it doesn’t, projects don’t move forward

Market Impact

This is directly contributing to:

• Fewer pre-sale launches

• Reduced investor demand

• Slower absorption

• Stalled rental development

This isn’t just a cost issue—it’s a structural shift in how real estate development works in Vancouver.

Understanding it is key to making informed decisions in today’s market.

Want to understand how this impacts your property or development potential?

Let’s have a strategic conversation.

The real estate market in British Columbia is undergoing a structural shift—and one of the biggest changes is happening quietly.

Investor buyers, once a major driver of activity, have stepped back in a significant way.

The Big Picture

This isn’t just a slowdown.

It’s the result of multiple pressures hitting investors at the same time, fundamentally changing the risk-reward equation.

1. The Cash Flow Problem

Rising borrowing costs combined with softer rental income means many properties no longer generate positive cash flow.

This alone has changed investor behavior dramatically.

2. Government Intervention

Policies across all levels of government have targeted speculative demand.

The result is higher costs, more restrictions, and increased complexity for investors.

3. The Pre-Sale Shift

Pre-construction projects once relied heavily on investor participation.

With that demand reduced, developers are facing slower absorption and increased uncertainty.

4. Changing Market Psychology

The assumption that prices will always rise is no longer driving decisions.

Investors rely on momentum—and that momentum has softened.

5. Reduced Foreign Investment

Foreign capital, while not dominant in volume, played a key role in certain segments.

That demand has largely been removed.

6. Capital Rotation

With alternative investments offering competitive or better returns, capital has shifted away from real estate.

The Structural Shift

We’ve moved from:

Investor-driven market → End-user driven market

This has major implications:

• More balanced conditions

• Less speculative pressure

• Greater importance on fundamentals

What This Means Going Forward

The absence of investors has created softer conditions—but also opportunity.

When key factors improve:

• Interest rates stabilize

• Rental markets tighten

• Policy pressure eases

investors will return.

And historically, they return quickly.

Investor demand hasn’t disappeared permanently.

It’s paused—waiting for the numbers to make sense again.

If you want to understand how this shift impacts your real estate strategy, reach out today for a tailored conversation.

One of the most common mistakes sellers make is choosing the agent who gives the highest price estimate. While it may feel reassuring, it can actually cost you time, momentum, and ultimately money.

Why Higher Estimates Happen

Some agents genuinely believe your home could command a premium price. This is more likely when inventory is low or your property has unique features.

However, in many cases, higher pricing is used as a tactic to secure the listing. Once the home is on the market and activity is low, price reductions follow.

The Risk of Overpricing

Today’s buyers are highly informed. They monitor new listings closely and understand market value.

If your home is overpriced at launch:

• You lose your most important exposure window

• Showings are limited

• Buyers become skeptical

As time passes, your listing can feel stale, even if the property itself is not the issue.

Why This Leads to Lower Sale Prices

The pattern is consistent:

Overpricing leads to low activity
Low activity leads to price reductions
Price reductions weaken your negotiating position

In contrast, a well-priced home generates interest, competition, and often stronger offers.

What Sellers Should Focus On

Success in today’s market comes down to:

• Accurate and strategic pricing

• Strong early marketing

• Creating urgency among buyers

The goal is not to test the market. It is to engage it immediately.

Ask Better Questions

Instead of focusing on price alone, ask your agent how they will create demand in the first two weeks.

That answer will reveal their true strategy.

The highest price estimate is not always the best strategy. The right approach is the one that positions your home to attract the most serious buyers from day one.

If you are considering selling and want a strategy tailored to today’s Vancouver market, reach out to Andrew and Jill Hasman for a consultation.