Crisis in British Columbia’s Housing Sector: Industry Leaders Sound the Alarm
A coalition of major real estate developers, industry representatives, and construction leaders in British Columbia is raising the alarm over what they call a "crisis" in the province’s housing sector. In an open letter dated July 29, 2025, they articulated their concerns regarding strict foreign buyer restrictions, claiming that these policies are choking off new home construction and jeopardizing thousands of jobs in the province.
The Open Letter to Government Officials
The letter, addressed to key figures including Prime Minister Mark Carney and B.C. Premier David Eby, features 26 signatories from prominent real estate firms. They are calling for urgent reforms to Canada’s temporary foreign homeownership ban and the B.C. government’s additional tax on non-resident buyers. While these measures were originally implemented to curb speculation and enhance affordability, industry leaders contend that the unintended consequences are slowing down housing starts and undermining the provincial economy.
Dramatic Decline in New Housing Starts
The statistics underline the severity of the situation. New housing starts in B.C. plummeted by 50% between March 2024 and March 2025, falling dramatically from 4,867 to just 2,379 units. Reports indicate that year-to-date condo and multi-family housing starts are down 22% in B.C. and 29% in Ontario. This downturn is particularly alarming as some major condominium projects in Metro Vancouver are going under receivership due to their inability to meet pre-sale targets. A notable example is the troubled 60-storey Curv tower project, which aimed to provide substantial strata and rental housing but failed to maintain viability.
Employment Impact and Industry Layoffs
The ramifications of these declining housing starts extend beyond construction numbers; they are affecting employment as well. Layoffs have been reported at leading real estate development and marketing firms in the province, signaling a troubling trend. Beau Jarvis, the CEO of Wesgroup Properties, emphasized the urgency of the crisis, stating that many housing projects are being canceled or delayed, rendering them financially nonviable. “This is a cost-of-delivery crisis,” he asserted, highlighting that the rising costs are pushing the housing market further out of reach for average buyers.
Long-Term Supply Concerns
If the current trends continue, the long-term supply of homes in British Columbia will lag even further behind rising demand, exacerbating affordability rather than improving it. This situation poses a risk that will be felt not just immediately but in years to come, as housing projects typically require significant time for planning, design, permitting, marketing, and construction.
The Pre-Sale Financing Dilemma
The letter underscores that new condo developments rely heavily on pre-sales to meet financing thresholds. This reliance is especially critical for obtaining construction financing, which, according to the coalition, is often influenced by investor-focused buyers. The coalition argues that without adjustments to these financial frameworks, housing starts will continue to decline, leading to even greater affordability issues.
Looking to Australia for Solutions
Industry leaders have suggested that Canada could benefit from reviewing housing reforms implemented in Australia in 2025. These reforms allow foreign investments in newly constructed homes while still restricting foreign purchases of existing homes. They believe that similar adjustments could usher in a "revitalization" of the real estate and construction sectors in Canada, all while safeguarding local buyers.
Request for Government Intervention
The letter makes a direct appeal to government leaders, stressing the critical role of the new home construction industry in maintaining a robust B.C. economy. It calls for a reconsideration of the national foreign buyer ban and provincial foreign buyer tax, suggesting reforms based on the Australian model to revitalize housing starts and address other structural challenges in the building industry.
Current Restrictions and Future Consequences
Under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, most non-Canadian individuals and entities have been barred from purchasing residential property in Canada. Initially enacted in January 2023, this ban is set to expire in January 2027, following a two-year extension announced in February 2024. The coalition is urging timely government action to mitigate the housing crisis even before the ban’s expiration.
In response to mounting pressure from the industry, the federal government has made some adjustments to the foreign homebuyer restrictions, including allowing temporary residents on valid work permits to purchase one property and lifting restrictions on purchasing vacant land. However, many stakeholders argue that these measures do not go far enough in revitalizing the market.
The Broader Debate on Housing Policy
The concerns raised by this coalition contribute to an ongoing debate about Canada’s housing policy. While recent federal and provincial measures have aimed to limit speculative demand in an effort to stabilize home prices, critics contend these restrictions are inadvertently hampering housing supply. High construction costs, extended permitting timelines, and labor shortages remain significant hurdles that need urgent attention.
Conclusion: A Call for Balanced Solutions
The situation in British Columbia serves as a microcosm of broader challenges facing many urban centers across Canada. Industry leaders believe that with coordinated action from federal and provincial governments, it may be possible to implement meaningful reforms that could ultimately enhance housing supply and improve affordability for British Columbians. The path forward will require a careful balance of interests—supporting local buyers while facilitating necessary investment in new construction to meet the province’s growing housing demands.
