The Metro Vancouver land market is sending a clear message: developers are cautious, distressed land sales are rising, and the cost of building homes is higher than ever. Behind the scenes, one of the biggest culprits is something many buyers and sellers never see—government red tape and development-related fees that are quietly crushing housing supply.
Despite strong underlying demand, developers are pulling back. The data from Q1 2025 shows a sobering picture:
📉 Distressed Sales Are Becoming the Norm
According to a report from Avison Young, 22% of land transactions over $5 million in early 2025 were court-ordered—a significant jump from 10% during the same period in 2024. These sales are resetting land values across Metro Vancouver, offering lower price points—but even those aren’t enough to spark new construction.
Why? Because the development math just doesn’t work anymore.
💰 The True Cost of Development Is Shocking
Colliers’ EVP Casey Weeks shared a striking example: a 1.4-acre site in Burnaby was bought for $30 million, but the developer had to pay $42.5 million in fees—more than the land itself. These fees include:
Municipal and regional development cost charges (DCCs)
Amenity contributions
Permitting, servicing, and approval costs
And a long list of other layered government fees
Weeks summarized the situation bluntly:
“Upper levels of government need to take a hard look at this. Not enough homes will be built to catch up to the lack of supply.”
🚧 The Impact of Red Tape Under the NDP Government
The BC NDP government has publicly committed to solving the housing crisis, but many industry experts argue that the policies being implemented are doing the opposite.
Instead of clearing the path for more homes, developers face:
Inconsistent municipal regulations
Long delays in permitting
Ever-rising government fees
A complex, bureaucratic process that drains resources and time
While headlines promote bold housing targets, the reality on the ground is that many projects are being shelved due to lack of feasibility. Developers can’t move forward if the costs are unpredictable and the policy environment keeps shifting.
🏘️ Demand Is There, But Projects Aren’t Launching
Even with townhomes in places like Surrey and Langley now priced around $900,000 (down from $1.2 million just a few years ago), pre-sale absorption rates are sluggish. Developers can’t secure financing without a strong sales pace, and the higher interest rate environment isn’t helping.
In the Fraser Valley, land sales are down more than 80% from two years ago, according to Varing Marketing Group. That drop reflects developers’ hesitancy to acquire new land without knowing if the economics will work in their favour.
🚀 Some Are Still Moving – But Only in Prime Locations
Some developers are forging ahead in key areas. Polygon Homes recently purchased a high-profile site at Cambie and West 41st with plans for a 31-storey mixed-use tower—but this kind of risk-taking is rare and generally limited to sites near transit and core urban centres.
🔚 Final Thoughts: We Need Policy That Supports, Not Stalls
The housing crisis can’t be solved by market forces alone. Developers want to build, but they’re hitting a wall of fees, delays, and uncertainty—much of it tied directly to provincial and municipal policy.
If the current government, especially the BC NDP, truly wants to improve housing affordability, it must address the crushing costs and bureaucratic gridlock that are stalling supply. Reducing red tape and reforming fee structures isn’t just good policy—it’s essential if we’re going to build enough homes for the future.
Thinking of buying, selling, or investing in Metro Vancouver or the Tri-Cities? Let’s connect. I’m here to help you navigate this ever-changing real estate landscape with experience and insight.
✨ Tara Kennedy
🏡 REALTOR®, ABR, RENE, SRS
📞 236-992-8989
🌐 TaraKennedy.ca
📧 TaraKennedySells@gmail.com
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