With multiple policy changes at the local, provincial and federal level designed to spark new residential construction, Western Canada’s residential land market should be on fire.
But multi-family broker Mark Goodman of Goodman Commercial Inc. in Vancouver sees quite a different reality, with a surge in listings giving buyers the upper hand and putting downward pressure on prices. Often, a couple of price reductions are needed before offers start rolling in – and even then, it can be tough.
“There’s been a monumental reset in the Metro Vancouver real estate market, in all asset classes,” he said.
“We have so much product, and we’ll hit the market with a price that is 25 or 30 per cent below where it was two and a half, three years ago – and it’s crickets!”
No market has been hit harder than residential land, with real estate analytics firm Altus Group reporting just 59 residential land sales in Metro Vancouver in the first half of 2025. This compares to 294 in all of last year.
“The land market has been crushed. It’s the worst,” Goodman said. “We were selling Broadway Plan sites at $200 a foot buildable; we can’t even get anything done for $100 a foot buildable.”
Covering a 500-block area between 1st and 16th avenues and bounded by Vine Street and Clark Drive, the Broadway area has 121 residential projects representing 23,857 housing units in the pipeline according to city data but realizing them will take time. Just four building permits have been issued in the area in the past three years.
“Probably 85 per cent of those developments along the Broadway Plan aren’t going to get built any time soon,” Goodman noted.
The uncertainty is part of what’s helping kill deals, said Joe Varing, principal of Varing Marketing Group at Homelife Advantage Realty (Central Valley) Ltd. in Langley.
On the one hand, developers don’t know if they can get projects through municipal approval processes; on the other, they don’t know if the demand will be there given the uncertainties consumers are facing.
“The uncertainty out there is what’s driving indecision in real estate,” he said. “If I don’t know if my job is going to be around in 18 months, am I going to buy a $2 million house?”
Varing estimates transactions are down 90 per cent from three years ago, a figure borne out by Altus Group’s numbers.
What are moving, however, are entitled sites, especially single-family lots that the province designated for four- and six-plex developments as a matter of course.
“One can buy it in an in-fill neighbourhood and start construction, likely within a year because it doesn’t require rezoning,” he said. “Single-family lots … will offer a much higher return on investment than buying a piece of raw land and taking it through the process, then waiting multiple years to get it approved – if you can get it approved.”
Varing estimates holding costs at eight to 10 per cent a year, when mortgage interest, taxes, development fees, consultants and the like are taken into account.
This effectively means the need for rezoning is as significant a barrier to development as remediating contamination.
“All the land that requires rezoning into condos and townhomes is now challenged in a developer’s pro forma because they have to factor in multiple years of carrying costs,” Varing said.
Given the number of opportunities to choose from, buyers can afford to be picky while sellers need to ensure properties are in tip-top shape or priced to sell.
“If there are issues of any kind, such as the municipality having some pushback … or any kind of roadblocks like we typically see in the development world, it’s going to be a challenge to sell, just because there are more opportunities out there right now,” said Jag Cheema, a commercial agent with Royal LePage Wolstencroft Realty in Mission. “If a parcel is priced right, and it’s zoned right and literally has everything going for it, it will sell.”
Similar to Varing, Cheema said single-family lots are doing well given the straight-forward path to higher-density development.
“We’ve done a lot of deals in the Cedar Valley area of Mission,” he said, and recently listed a holding parcel in the Cedar Valley area of Mission that exemplifies current trends.
Situated at 33181 Dewdney Trunk Road, the 4.57-acre site has the potential for 16 single-family lots in the third phase of the Cedar Valley development area.
“It may be a five- to 10-year hold,” he said, noting that the pricing of just under $4 million reflects this.
The tract jibes with Varing’s recommended strategy in the current market.
“I’m a major advocate of either subdividing a small piece of property into single-family for four- and six-plexes,” he said. “You could have a permit within a year, so you could have 10, 15 of those on the go, and you know where your destination is. It’s all do-able.”
Cheema believes Alberta is faring better because the job market is less vulnerable to tariff impacts and therefore more resilient in terms of homebuilding. Combined with risks associated with municipal approvals, many brokers in B.C. say the odds have tipped in favour of Alberta.
Harvey Russell of NAI Commercial in Calgary agrees. Both a broker and a developer, he has 400 multi-family units on the go, and the level of interest from B.C. is high.
“People are coming here, capital’s coming here, investors are coming here,” he said.
But the market isn’t gangbusters like it was in 2022, or even last year – a landmark year for Russell, who did $380 million worth of deals, including the sale of 1402 8th Avenue NW, Calgary, to local developer Bankside Properties and Sumus Property Group of Lethbridge. Designated for a million square feet of development near the Southern Alberta Institute of Technology, the site sold for $38.1 million.
“But the shine’s come off,” Russell said. “There’s fewer rental apartments being built. CMHC has tightened up the financing.”
But the market remains in good shape, with just one distress sale versus six in Vancouver.
“Calgary’s housing market has historically adjusted quite favorably to the ebb and flow of inflation and supply demand. This has resulted in modest value adjustments and avoided severe adjustments like in Toronto and Vancouver,” he said. “[And] the job situation is probably the best in the country.”
Russell said high-density sites have led the shift, with prices down by half in the past four years, as construction costs increased.
“If there’s one weak market in Calgary, it’s high-density,” he said. “They’re struggling to get the high-density sites to pencil.”
Meanwhile, a suburban site that sold for $1.1 million an acre seven years ago is now valued at $1.7 million an acre.
“That’s because there’s way more demand for it, and the numbers work better for lower density,” Russell said.
The abundance of listings, combined with price reductions, make now a good time to get into the market, Varing said.
“There’s a lot of opportunity for builder-developers, owner-investors,” he said. “New money can enter into the market.”
