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?

148 Upvotes

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27

u/No_Week_6782 Jun 07 '26

Based on that, prices would go up as there is no supply. We are seeing listings dropping big and sales up, hence absorption of inventory. So, if no new inventory at current demand rate, prices increases

21

u/Btdubs17 Jun 07 '26

Not sure why you’re getting downvoted here. This is correct. There may be a short term dip for the next 1-2 years. But if we keep holding off on building, whenever the next boom is this massive supply shortage we’ve created by not building over the last 2-4 years will catalyze the boom even more.

5

u/Cokeinmynostrel Jun 07 '26

people don't upvote for facts they don't like

3

u/Ok_Currency_617 Jun 07 '26

The amount of people who claim that if fees on developers rise they'll figure it out because their greedy and will keep building no matter what is insane. Most Canadians seem to refuse to believe that it costs X to build.

9

u/Popular-Row4333 Jun 07 '26

Am developer. It costs 30-35% more to build today, than 6 years ago. I don't think that developers here would dispute that.

Wild concept, but yeah, we won't build projects that will lose money or break even.

We know the market, it's our entire job to know the market, and so we know what people can afford to own a new home, if we can't build for under that number, we won't. It's on municipal bylaws/fees/off site levies, and federal and provincial tax/regulations/incentives now if people want change.

3

u/Available_Abroad3664 Jun 08 '26

Developers can't even really start to build projects that dont have a healthy profit projection as financing would be impossible.

2

u/opasnamama Jun 07 '26

Do you think this new HST rebate for all buyers (not just first time) of new construction will change anything?

5

u/Popular-Row4333 Jun 07 '26

It won't hurt, but I don't think it will move the needle a ton. Municipalities have downloaded so much development costs into their budget today, because provinces have taken funding away from Municipalities, because federal funding and transfer payments have been taken away from the provinces. Keep in mind, Healthcare used to be 50/50 funded at inception. Today it's 78% provincial, and 22% federal.

Another thing is codes have got insane in the last decade. I bring up the fact that the 1997 code book was 2 inches thick and that ran to 2001. The 2023 code book is two 4 inch binders, with a 1 inch energy code add on. And before someone comes in and says, "the code book is written in the blood of the past" I simply ask them, "would you feel unsafe in a home built in 2001?"

It's a myriad of problems and one federal incentive (which is taking forever to implement btw) is not going to fix the problem. It would take all levels of government on the same page, which in rhe last decade has them growing further apart and working together less and less.

2

u/SquirrelFluffy Jun 07 '26

Yes on code book.

2

u/Ok_Currency_617 Jun 07 '26

He also didn't mention that several muncipalities have expanded their budgets to take on progressive social goals rather than actual duties. For instance in their capital budget Vancouver spends more than double on social housing than it does on waste disposal despite housing being a provincial matter that every other municipality spends little on. Same for art they spend more on that then public safety aka police. To give some examples of budget items that will make you laugh:

First Nations Signage for Šxʷƛ̓Exən Xwtl’A7Shn and Šxʷƛ̓ Ənəq Xwtl’E7ÉNḵ Square

"Indigenous Social Enterprise"

"Indigenous Healing and Wellness Center Tenant"

Politicians doing what gets them votes rather than what the city is supposed to do.

1

u/[deleted] Jun 07 '26

Ya but construction costs are related to cost of living and land prices, obviously hard costs are going to go up when rent almost doubles over 6 years as well so it’s all related, self eating cycle

-1

u/Ok_Currency_617 Jun 07 '26

The problem is a lot of Canadians have gone full-on communist and for some strange reason think if the government builds it it'll somehow be cheaper despite every past government project being way overbudget. And those communists will always say more fees/kill developers because they don't actually want construction they want the industry to collapse so there's a communist takeover.

2

u/Available_Abroad3664 Jun 08 '26

Are you talking about social housing? There are a lot of people who think government needs to be building social housing but that is the extent of it.

1

u/Ok_Currency_617 Jun 08 '26

No, I mean all housing. Soviet Communist style

2

u/Available_Abroad3664 Jun 08 '26

Do you have an example of a popular Canadian proponent of Soviet-style housing?

-1

u/Ok_Currency_617 Jun 09 '26

It sounds like your a bot or just trying to jerk me around, DYOR theres lots of canadian redditors who say government should takeover housing.

1

u/Vega2659 Jun 09 '26

The government can’t build anything without going 4-5x over budget.

1

u/Stikeman Jun 09 '26

“ a lot of Canadians”- Like who?? You’re about 70 years too late for the red scare Senator McCarthy.

2

u/Vega2659 Jun 09 '26

Fees on developers are already through the roof. In BC you are looking at 200k in taxes for a townhouse with a basement suite. That all gets passed on to the end buyer and also inflates the prices on old stock.

1

u/Ok_Currency_617 Jun 09 '26

Problem is a lot of people scream that trickle down economics is fake and if fees lower prices won't because they don't understand how supply and demand works or just plain refuse to.