‘Perfect storm’ of market conditions threatens Vancouver rental projects: CMHC
Developers holding back or delaying projects, according to new report
By Claire Wilson | December 20, 2023
A “perfect storm” of market conditions is threatening the delivery of rental housing in Vancouver and across Canada, according to the Canada Mortgage and Housing Corp. (CMHC).
Rapidly rising interest rates, high construction and government fees, as well as taxes and levies have complicated the financial feasibility of new rental projects, states a Dec. 18 report commissioned by the crown corporation.
“Developers today are responding to a ‘perfect storm’ over the last three years in Canada – construction costs are up by over 50 per cent, conventional lending rates have more than doubled and government fees in markets such as Vancouver and Toronto have increased to over 25 per cent of construction budget costs,” said the CMHC’s report, which was authored by financial services firm Ernst & Young LLP (EY).
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https://biv.com/article/2023/12/perf...-projects-cmhc