British Columbia’s real estate market has long reflected the province’s global appeal. After the 2010 Winter Olympics, Vancouver emerged as a city of opportunity, attracting global attention for its culture, safety, and natural beauty. Migration and investment surged, fueling an unprecedented housing boom. However, as prices rose, homes became unattainable for many local and first-time buyers. Properties shifted from homes to high-stakes investments, pricing out residents.
In response, the government introduced cooling measures like foreign buyer taxes, speculation taxes, and short-term rental regulations, aiming to restore balance and give local buyers a fair shot in an increasingly competitive market. While these measures curbed some of the aggressive investment activity, they also led to unintended consequences. Developers, facing mounting restrictions and soaring construction costs exacerbated by new U.S. tariffs on Canadian goods, began to pull back. The cost of building materials like steel, aluminum, and lumber surged, making new projects less financially viable.
As Milan Mann, president of real estate development and construction at BM Group, explains, "The biggest threat is not any individual cost increase—it’s the broader economic uncertainty that can paralyze activity across the industry." Milan Mann highlights that current housing policies have placed an undue burden on developers. "Too often, recent policies have placed developers in the role of messengers, creating confusion and misunderstanding for buyers," he says. He believes that a clearer, more streamlined process is needed, with direct subsidies to buyers and a GST rebate for all new homes, regardless of price point.
Milan Mann also stresses the importance of deferring Development Cost Charges (DCCs) until occupancy to ease financial pressure during the early, most vulnerable stages of development. "We have the unique vantage point of seeing activity at both ends of the project lifecycle—from early planning and site preparation to final fit-outs and handovers," Milan Mann notes. "What we’re seeing is a declining number of project starts across the industry." This slowdown is more than a temporary dip; it signals a constricted housing pipeline that could exacerbate affordability issues in the years to come.
JT Mann, a development land sales specialist, echoes these concerns and calls for urgent public-private collaboration. "The private sector gets things done fast and efficiently," he notes. "We need to accelerate housing supply, streamline approvals, invest in infrastructure for growth, strengthen affordability, support buyers, address speculation, and stabilize demand."
Both industry experts point to the province’s new short-term rental regulations as a major disruptor. Under the Short-Term Rental Accommodations Act, most short-term rentals are now limited to principal residences, severely restricting the once-thriving Airbnb market. JT Mann explains that many property owners have been forced to sell or convert their properties into long-term rentals. While this has provided some relief to the rental market, it has also diminished investment opportunities and potentially stifled tourism-related housing options.
Furthermore, the impact of U.S. tariffs cannot be overstated. JT Mann reveals, “The BC government estimates a cumulative loss of $69 billion in provincial economic activity between 2025 and 2028, with 124,000 potential job losses and a substantial decline in corporate profits and government revenues.” Undoubtedly, construction costs are rising, project timelines are extending, and developers are facing tough decisions about whether to proceed or pause.
Charan Sethi, founder and president of Tien Sher Group, shares similar concerns and emphasizes that the speed of municipal approvals and the expansion of housing supply must remain top priorities. "Streamlining the permitting process, rewarding municipalities that meet or exceed housing targets, and allowing greater density are all critical steps," he comments. Charan Sethi commends cities like Surrey for improving their permitting systems, but stresses that policy consistency is crucial. "Sudden regulatory changes create uncertainty and slow progress. A consistent, long-term approach will restore market confidence."
Charan Sethi also advocates for broader support for homebuyers, including reintroducing 30-year amortizations, revising the mortgage stress test, and expanding down payment assistance. "Extending the GST exemption to all new homebuyers—not just first-timers—would provide further relief," he notes. He underscores the importance of encouraging purpose-built rentals through tax incentives and warns against penalizing investors who contribute meaningfully to the long-term rental supply.
The recent short-term rental restrictions, while aimed at addressing housing shortages, have had ripple effects across the economy. Charan Sethi points out that many individuals who relied on short-term rental income, particularly retirees, now face financial strain. He details, “Restrictions have also negatively affected local businesses that depend on tourism, as reduced visitor accommodation has led to fewer customers for restaurants, shops, and service providers." Additionally, the surge in U.S. tariffs has pushed up the cost of building homes by as much as $10,900 per unit, forcing developers to delay projects and renegotiate contracts.
Looking ahead, industry leaders anticipate that BC’s residential sales will remain subdued in 2025, with a potential rebound in 2026 as economic confidence improves. Charan Sethi predicts that home prices will stay stable with modest recovery expected through 2026 and 2027. However, slow presale activity and developer caution could limit new project launches, potentially worsening the housing shortage by late 2026.
Milan Mann emphasizes that the government should consider partnering with developers to share risks and encourage housing starts. "Such an approach would enable more projects to move forward, maintain momentum in housing starts, and ultimately benefit the broader market," he explains. JT Mann stresses that a balanced, multi-pronged strategy is essential for market stability. "A multi-pronged approach—centered on boosting supply, supporting infrastructure, curbing speculation, and fostering innovation—will stabilize BC’s real estate sector and support both buyers and sellers," he says.
Surely, despite the current challenges, there is cautious optimism that British Columbia’s real estate market can recover with the right policies and collaboration. Lessons from past booms, affordability struggles, and regulatory changes can guide a more balanced future focused on stability, accessibility, and ensuring housing remains within reach for all residents.
