The top-performing new homes developments were:
Why are so many of the top-earner developments in Surrey or Langley?
The top-earning developments in Surrey and Langley are driven by more affordable wood-frame housing, which is priced $150 – $200 per sq. ft. ($1,615/m² – $2,153/m²) lower than concrete products. These cities offer lower land costs and more available space, enabling developers to build larger, multi-building sites that generate similar revenues to high-rise towers without the added cost and complexity of urban projects.
There are three key reasons for the lower cost base of wood-frame projects in suburban neighbourhoods:
- Lower labour costs: suburban trades are more local and don’t charge the same premiums as in Vancouver or Burnaby.
- Fewer logistical challenges: suburban sites are less congested, reducing construction complexity and costs.
- Regulatory factors: Vancouver and Burnaby adhere to stringent energy codes (e.g. Step Code), which increase construction costs. Suburban municipalities generally have less stringent requirements.
A lot of the growth over the next five to ten years is projected to be in the Fraser Valley. I think Surrey is leading the way in terms of projected population growth. So I think the demand is already heading there. And now the supply is really just meeting that demand.
What does that mean for people looking to buy into a new homes development? Should they consider areas that historically have had high-revenue projects? Will they have a higher chance of seeing their pre-sale reach completion?
Suburban areas offer more affordable options, and developers may be able to offer better deals since their bottom lines are less pressured than those in urban centres. The project is more likely to complete if the developer can meet its absorption target for construction financing.
But I don't think people are really assessing that across the board. I think the projects in the suburbs are more likely to make it through to construction, but it really depends on who the developer is as well. And so if it's a reputable developer, no matter where the project is, it'll generally make it because they're gonna put their own money in to get it to construction if needed, because their brand and their reputation is on the line.
So I would say the most important thing when evaluating whether a project is going to make it through to construction is looking at the developer's track record. Have all their other projects gone to construction? How has the product turned out? Are people happy?
Do any of these developments have features or amenities that make them more attractive to buyers?
Affordability is the primary driver for these projects, so amenities are typically kept simple to maintain lower construction costs. This helps to keep strata fees more affordable for future owners.
I think when you're in the concrete product type, it appeals to a different buyer. It appeals to a more sophisticated buyer that isn't as price-conscious.
A buyer willing to pay an extra $100 to $150 per square foot ($1,076/m² to $1,615/m²) for a concrete product over wood-frame, due to its longer lifespan and durability, is someone with the financial flexibility to spend more – particularly in a market where housing costs are already high. For a 500 sq. ft. (46.45 m²) one-bedroom, this could add $50,000 to $75,000 to the purchase price.
They have that luxury to be able to pick and choose: okay, I want this product type because it fits my needs. That buyer type is also the one who is more going to be looking at their amenity packages and the amenity options as well, because they're willing to pay more to get more, whereas the buyer that's the suburb buyer is more so looking at value and price and they're way more price-conscious. So they don't really want all the bells and whistles in their amenity package because at the end of the day, it makes the price of their unit higher and their strata fee is higher.
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I would say the most important thing when evaluating whether a project is going to make it through to construction is looking at the developer's track record. Have all their other projects gone to construction? How has the product turned out? Are people happy?
Darcy Rai
Founder of Real Property Data
Was there anything nearby that made these developments attractive to buyers, such as easy access to transit or nearby parks, shopping, schools, etc.?
All five wood-frame projects on the list are situated near major commuter routes, providing easy access to highways. However, only two of these projects are within a 15-minute walk of a transit station.
In contrast, the five concrete high-rise apartment projects are all located in transit-oriented developments, each within a short walking distance of a train station.
One-bedroom units have the highest PSF (price per sq. ft.), but many potential buyers in the Lower Mainland say they want two- or three-bed units. How do developers balance this?
In 2024, demand for two-bedroom units surged, as they were traditionally seen as "loss leaders." Investor demand has fallen due to stricter housing policies and a slower economy, shifting focus toward end-users who prioritize usability and are willing to pay more for larger units. Developers must balance size and cost efficiency to meet these end-user needs while keeping prices within reach.
A lot of the cities do have policies in place where you have to have a certain percentage of two-beds and three-beds. In Vancouver, especially, I think 50% of the units have to be family-sized. And at least 10% of those have to be three-beds. I would say that in the past, the demand has spoken for itself to show that the one-beds were the most popular.
And even though the two-beds and three-beds were being developed, they still weren't being sold as fast, because the price was so much higher. So it's a bigger investment – it takes a lot of people longer to make that decision.
There's also a very small pool of buyers. But now we're really seeing a growing demand for two-bed units. I personally haven't seen anything that's demonstrated that the demand for three-beds has increased, but two-beds for sure, because it's in that sweet spot where it's still less expensive than a townhome but bigger than a one-bed.
Were any of these developments especially challenging to construct, whether due to local conditions, regulations or other factors?
This has been touched on in previous responses, especially regarding land costs, labour availability and regulatory environment. In the suburbs, I don't think that issue is as big of a concern because the workforce is all coming from there. And so finding qualified workers in the suburban cities is much easier than it is to ask the qualified workers to come out and travel to Vancouver every day and spend an extra, you know, three hours of travel time, unless the price is worth it.
But even then, it's generally not worth it if you can work close to home. I think the labour force aligns well with the growth that's happening here. Also, as we're seeing less construction take place – because the market is slow, fewer projects coming to market, fewer units are selling and making it to construction – I think it’s actually going to alleviate some of the labour constraints.
Have you noticed any changes in the buying habits of new home buyers after the Bank of Canada’s rate cuts?
There’s been no significant changes in buying behaviour linked to rate cuts. If anything, we’ve seen a slower market in the second half of the year, which is around the same time the Bank of Canada started cutting their rates.
Therefore, timing was crucial. Nine out of ten projects on the list launched in the first half of the year. In the second half of 2024, the market slowed. One exception, Inlet District, launched in late October and saw strong absorption due to pent-up demand from local end-users and being the first phase of a master-planned community.
While there are towers represented in the highest revenue-generating developments, many seem to be mid-rises. Is there any reason for this?
Concrete high-rises typically target the investor market, and due to their higher price points and larger number of units, the list of top revenue-generating projects in the past has often been dominated by high-rise developments.
Today, we’re seeing the more affordable product selling, as investors are currently sitting on the sidelines.
The bottom line.
New homes developments show us where, what and how housing stock is being added to Metro Vancouver. By taking a look at the data, we can see that the suburbs are likely poised to absorb much of the region’s growth, especially Surrey, Coquitlam and Langley Township. Plus, with the better economics of mid-rise wood-frame construction, many more of these types of projects may be built in the coming months and years.
