July 6, 2026 | Below Construction Costs

Happy Monday Morning!

We got further confirmation from the Eby government this past week that the condo bailout will move forward. My full thoughts here.

“You’re hearing directly from developers that this is not what they asked for and it is not from their perspective a bailout,” he says. “When you buy something that’s on liquidation, you don’t say to yourself, ‘I’m supporting a bailout for the store.’

Adding,

“This is an opportunity for us to recognize the reality that people can’t wait for housing. We can buy housing at below our construction cost and make it available affordably, and if we don’t do it, someone else will do it.”

The Eby government says they will buy housing at below construction costs.

Newsflash, everything is selling below construction cost today. Which is also why the pre-sale market no longer functions.

If the government is looking for properties selling below construction costs, look no further.

We have the first resale at the Butterfly project since the building completed over a year ago. It just traded at $1425/sqft, well below its pre-sale price of $2400/sqft.

Here’s another one just down the street at Landmark on Robson. It just sold at $1,190,000, well below the pre-sale sticker price of $2,591,000.

This puts the current market value of high-rise luxury in Vancouver at $1272/sqft, which absolutely no developer could even come close to building for.

Like we said, just about everything is selling below construction cost these days, and so we’d agrue this isn’t a great investment thesis, although we wouldn’t expect much different from the government.

Nonetheless, price discounts are plentiful in the marketplace today, and we believe more is coming, regardless of the bailout package.

Mostly because developers are stuck with a lot of unsold condo inventory. Based on data compiled by Altus Group, this figure sits at about 12,000 condo units.

Furthermore, there is still a lot of bloat in the resale market, even with the market improving ever so slightly in recent months.

We currently have 6.2 months of inventory in the resale condo market as of the end of June. This is high from historical standards, although things have been improving in recent months. Encouraging news for a beleaguered condo market.

With the high levels of inventory on the market, we are still seeing downwards pressure on prices. Both the benchmark price, and the average price per square foot for condos has declined by 7% over the past year.

However, I don’t feel this fully captures the state of the market. From what we’re seeing on the ground, buyers are being incredibly selective. They’re taking their time and looking for condos in great locations, and more desirable buildings. These types of condos are holding their value better.

Meanwhile, older buildings, mediocre locations, or places that need renovations are getting hit hard. This product is often going no bid, and prompting sellers to hammer prices if they want to move on. Prices in this segment have declined by more than 10% over the past year.

Based on current market conditions, we fully expect more opportunities for buyers in the months ahead, although they might soon find themselves competing against the government, who will ironically be using their very own tax dollars to do so.

Let’s watch.

Steve Saretsky July 6th, 2026

Posted In: Steve Saretsky Blog

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