Vancouver’s once red-hot condo development sector is now following the same path as Ontario’s as major developers and marketing firms cut staff and offload assets amid what industry leaders are calling a “cost-of-delivery crisis.”
The latest to announce cutbacks is Wesgroup Properties, the developer behind the River District master-planned community, which revealed last week it would lay off 12% of its workforce. This came shortly after the condo marketing giant Rennie Group let go of 25% of its staff.
“The layoffs were the direct result of having to delay future projects,” Wesgroup president and CEO Beau Jarvis told The Globe and Mail.
He described the current environment as “unprecedented pressure” and emphasized, “Like many of our peers, we’ve reached a point where we must realign our operations for long-term sustainability.”
Jarvis noted that despite the restructuring, Wesgroup remains “fiscally sound.”
The market shift has been in motion since inflation spiked and interest rates began rising in 2022. Many developers have been forced to put projects on hold, lay off staff, or sell off property to cover costs, a trend that started with Coromandel Properties’ creditor protection announcement in early 2023 and has since rippled through smaller and mid-sized players.
Magnum Properties CEO George Wong reported that he, too, has reduced staff and is advising developers to postpone condo presales.
“You’d need to sell around 60% of the building within 12 to 18 months to get financing, and that is not currently achievable,” Wong explained, citing high interest rates, government anti-speculation policies, and wary investors.
“We’re in the same boat. We ride the same tide,” he said, adding that the current market has required constant adaptation.
Ontario’s homebuilding sector also warned of widespread layoffs and stalled housing delivery if construction costs remain steep.
Last week, the Building Industry and Land Development Association (BILD) reported that construction of new homes could bottom out at just 4,000 single-family homes and 10,000 apartments per year if market conditions don’t improve.
To manage cash flow, several developers are quietly offloading assets, sometimes at discounted prices to industry insiders.
“A couple of projects from big developers… have quietly signed nondisclosure agreements and passed on really attractive pricing to the insiders so they can move more product,” Wong said. “The banks [financing] presales, they will say: ‘Show me 150 sales, otherwise, we won’t give you the money to build.’”
In a statement, Jarvis described the current environment as a “cost-of-delivery crisis.” He confirmed that Wesgroup has been selling assets to cover costs and that the industry is delivering homes that many can’t afford.
Broader industry data highlight the extent of the downturn. Urban Development Institute president Anne McMullin noted that 22% of land sales over $5 million in Q1 2025 were court-ordered. There is growing pressure on governments at all levels to adjust policies, with industry leaders calling for lower municipal fees and a lift on the federal foreign buyer ban.
“There is generally a movement developing to ask the federal government to lift that,” said developer Michael Geller, who believes the absence of foreign buyers is affecting the broader market—not just presales.
Despite a record 33,000 new housing starts in Vancouver in 2023, many more approved projects are now stalled. The region’s vacancy rate for rentals is also at a 20-year high (excluding the pandemic), even as supply has shifted from condos to rental project.
Simon Fraser University’s Andy Yan cautioned that while the current environment represents a sharp adjustment, it may not be a disaster.
“Is this an end of sunny days or a prolonged period of climate change for the market residential industry?” he said. Yan also pointed out that while policies to curb speculation and boost rental supply are working, there is still much progress to be made on true affordability for local buyers.
“We decided to regulate for the public good and market exclusion, and this is where we are at. However, we still have far to go in terms of housing affordability for those on local incomes and without access to wealth.”
CMP
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