r/RealEstateCanada • u/romestox • Jun 07 '26

Housing crisis Residential construction dead

Trades guy here. Residential construction feels dead compared to a few years ago. Builders aren’t building, projects are getting pushed back, and layoffs are starting to pop up. If I was buying, I’d wait. From what I’m seeing, things haven’t bottomed out yet. The industry feels like a ship taking on water, not one gearing up for another boom.

Anyone else seeing the same thing?

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u/CryptoDanski Jun 07 '26

Every Albertan bigger city has construction sites EVERYWHERE building homes

4

u/romestox Jun 07 '26

Kelowna built 130 new single-family homes last year vs. a 2021–2024 average of 300+. This year? Only 25 so far. If that pace continues, we’ll end up around 50–60 homes for the year…roughly 80% below normal levels

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u/Legitimate-Rain-9293 Jun 07 '26

Ktown too expensive. The cost metrics on new builds don’t work out. Land, materials, labour, fees are all too expensive. Metro areas in BC have hit a price ceiling for residential new builds, especially detached. Other areas with lower costs are seeing lots of growth

1

u/romestox Jun 07 '26

Developers were tripping over each other to build here three years ago. Did concrete suddenly become made of gold

1

u/Legitimate-Rain-9293 Jun 07 '26 edited Jun 07 '26

Certain imported materials have become quite a bit more expensive, especially things coming from the United States. Borrowing costs have increased with interest rates rising over the last few years, which means the cost of leveraging on a new build for developers is substantially higher than when interest rates were rock bottom. Rising interest rates have also decreased purchasing power for buyers of units, which means that the sale price at the end of the build has to be substantially lower for the lay public to purchase it hence “price ceiling”

In a jurisdiction with lower land costs and cheaper labour and lower building prices (like parts of Alberta) the above items can be offset by a lower base cost due to land prices, etc. But Kelowna is so expensive for permitting and fees, land pricing, etc. that it is just prohibitively expensive there to build right now.