The companies responsible for building housing are raising alarm bells that all is not well with B.C.’s real estate industry
Not so long ago, developers were transforming old shopping malls into master-planned communities in suburbs such as Burnaby , B.C. and Coquitlam, B.C. Those days are over, says a prominent developer.
– responsible for about 20 per cent of B.C.’s GDP, including rental and leasing, according to Statistics Canada. It’s routine for developers to complain about regulations getting in the way, but the tenor of complaint is more frantic these days. They’re watching Toronto’s capsizing preconstruction condo market – taking on the burden of high costs – with a wary eye. They say profit margins are shrinking in B.C. as well, and many projects are either stalled or disappearing.
The project at the Port Moody Inlet District is one of the largest assemblies of detached houses on record.Materials have skyrocketed for reasons not always related to supply and demand. For example, every housing unit needs gypsum, or drywall. The cost of that material doubled almost overnight due to a tariff introduced before any pandemic supply chain issues, or inflation costs, says Steve Youngblut, general manager of Canadian Gypsum Co.
Gypsum is made from either natural rock or from the byproduct of coal-fired plant scrubbers, which used to be the cheaper source, he says. But coal-fired plants are shutting down across the U.S. The now in-demand crushed rock travels long distances from around the world, from places such as Spain and Turkey, and freight is expensive. Gypsum is also made from paper. During the pandemic, online retailers put huge demand on paper packaging.
“Some of these numbers thrown out there as long-term goals by the federal government, they’re obviously very challenging,” he says. Mr. Jones gives his Port Moody project as an example. The costs on that project are as follows: more than $8-million in community amenity contributions; $6-million for a new pedestrian overpass; $4.8-million for public art; $44-million for infrastructure upgrades; $33-million for municipal development cost charges; $58-million for Metro Vancouver development cost charges, and the untold costs of changing designs to keep up with new national building codes and new requirements.
Vancouver Real Estate Real Estate Noastack Housing Canada Development Cost Gypsum Developer Market Vancouver Brad Jones Burnaby Statistics Canada
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