Metro Vancouver's unsold condo inventory could soar by 60% in 2025: forecast
Apr 16 2025, 2:13 pm
Although borrowing costs are now on a downward trend, driven by the Bank of Canada’s recent decreases to the policy interest rate, the demand for strata market ownership condominium homes in Metro Vancouver is expected to remain weak for the foreseeable future.
According to a new forecast released today by local real estate marketing firm Rennie, the number of unsold condominium inventory is projected to jump by 60 per cent in 2025 — from 2,179 units in completed projects to 3,493 units by the end of 2025.
It is anticipated that roughly 1,500 sales will be made for completed or completing homes, based on the current absorption rates, and the number of projects that have already completed construction or will complete this year. Generally, “housing starts” are defined as the beginning of construction work on the building.
Ryan Berlin, the head economist and vice president of intelligence for Rennie, notes that the number of homes under construction overall today remains highly elevated, and housing completions are forecast to surge in 2025. If this pattern persists, there will be higher carrying costs for developers holding this elevated number of unsold inventory, which could reduce their ability to start other development projects.
This could put further downward pressure on prices and shift how housing meets the needs of buyers and renters.
“If the current trajectory holds, we’ll be ending 2025 with the highest level of unsold condo inventory in years,” said Berlin.
“That has real implications, not just for what gets built next, but for how the region manages affordability, absorption, and future growth.”
New secured purpose-built rental housing soars
Overall, all types of housing starts — including ownership and secured purpose-built rental housing — reached a record over 33,000 units in Metro Vancouver in 2023, and exceeded 28,000 in 2024. These overall totals are being propped up by secured purpose-built rental housing projects, with over 10,000 units beginning construction for each of the last two years.
The share of ownership housing starts has been on a falling trend, reaching 63 per cent of overall starts in 2024 — the second lowest, after 2022, since 1990.
The proportion of secured purpose-built rental housing starts in 2024 was 59 per cent higher than the average of the past 10 years. On the other hand, ownership housing starts in 2024 — totalling about 18,000 units — were 21 per cent below the 10-year average.
New secured purpose-built rental housing soars
Overall, all types of housing starts — including ownership and secured purpose-built rental housing — reached a record over 33,000 units in Metro Vancouver in 2023, and exceeded 28,000 in 2024. These overall totals are being propped up by secured purpose-built rental housing projects, with over 10,000 units beginning construction for each of the last two years.
The share of ownership housing starts has been on a falling trend, reaching 63 per cent of overall starts in 2024 — the second lowest, after 2022, since 1990.
The proportion of secured purpose-built rental housing starts in 2024 was 59 per cent higher than the average of the past 10 years. On the other hand, ownership housing starts in 2024 — totalling about 18,000 units — were 21 per cent below the 10-year average.
Furthermore, condominiums owned by individual private owners have historically been a key source of new rental housing supply, albeit unsecured. Without this sustained growing segment of investor-driven condominium demand, this contributes to the recent elevated demand for new secured purpose-built rental housing.
Steep drop in condominium investors and unsecured rental housing supply
Until recently, condominium investors accounted for 79 per cent of the new overall rental housing supply in Metro Vancouver since 2007. Rennie also shared that among the new home projects they marketed, the share of investor buyers has fallen by about 50 per cent in the past year to levels not seen since 2019/2020.
“Putting down a sizeable deposit to secure a pre-sale home to be delivered years later requires making a big commitment. Investors are often better suited to make that transaction, as they are investing in future returns. End-users, on the other hand, are often making a down payment on a home they need to occupy right away. Those investors, however, have pulled back from the pre-sale market due to a mix of high interest rates, new policies on taxation and short-term rentals, changes to the residential tenancy act, and new sources of uncertainty,” reads the forecast.
“The sluggishness of the pre-sale market is a direct result of these absent investor buyers, and they’ll likely need more clarity around interest rates, inflation, and policy from all levels of government (domestic and foreign) before they return in greater numbers.”
There were just 11,500 pre-sale transactions in 2023 and under 10,000 in 2024, and this downward trend could continue in 2025. In total, there are now about 16,000 unsold new homes across the region.
Pre-sales are essential for developers to secure construction financing from lenders and institutional investors, as funding is typically contingent on meeting minimum sales thresholds.
Provincial regulators have acknowledged this to be an issue. For this reason, earlier this year, B.C. Financial Services Authority announced a new pilot program that extends the “early marketing period” for developers with large projects of 100 or more homes by six months. This effectively provides developers of such large projects with a total of 18 months to secure their approvals and financing needed to complete their projects — up from 12 months.
Outside of the pilot project, under the Real Estate Development Marketing Act (REDMA), this early marketing period for all pre-sale projects regardless of size was previously nine months up until April 2020, when BCFSA extended it by three months to 12 months, initially as a temporary response to the onset of the pandemic. In May 2021, the 12-month period was made permanent.
“Changes to REDMA now give developers more time to meet pre-sale thresholds required for financing. Still, higher interest rates, policy shifts, and investor uncertainty are contributing to elevated — and growing — unsold inventory levels,” reads the forecast.
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