(photo: sourced image of Kelowna)
Developers in British Columbia are offering steep discounts as new inventory keeps stacking up, fuelling competition for buyers who can afford to shop around.
In Kelowna, Mission Group had a one-day flash sale on Saturday on all vacant inventory at its Alma on Abbott development, a boutique lakefront community located in Pandosy Village that was completed in October.
Mission Group president Luke Turri said half of Alma’s 87 units – ranging from studios to three-bedrooms – need to be sold. With the discount, one- and two-bedroom units will be roughly $425,000 to $505,000.
“We realize that we have to meet the market where it’s at,” said Turri, who’s been in the field for 20 years.
He said today’s buyers are highly informed and cautious.
“Buyers are seeing price corrections, incentive programs, construction delays, interest rates swinging, and they need certainty, they need credibility, and so for us the focus is, how do we create that momentum?”
Turri said Alma had a successful pre-sale launch, and Mission Group had always anticipated having available inventory after completion due to its target audience of end users, rather than investors.
In its latest monthly report, the Association of Interior Realtors said the market maintained a “gradual and steady pace” in October.
Still, inventory levels are elevated compared to historical norms. Interior Realtors reported 8,938 active listings at the end of last month, comparable to fall 2024 levels, but well above the 10-year average.
Buyers value deals, not gimmicks, says Realtor
Coquitlam Realtor Adil Dinani of Royal LePage West Real Estate Services agrees that buyers are in the driver’s seat, so developers are forced to be competitive.
“(Buyers) won’t even step inside your display suite or your presentation center if the price or incentive doesn’t earn their attention,” he said.
Dinani, who is experienced in representing developers, has seen a range of marketing campaigns, like a “live free for a year” sale, where the interest payments, strata fees and property tax were paid for the buyer’s first year, a saving of roughly $35,000 to $75,000 in most instances.
He also recalls a campaign last year that included a new Porsche with a condo purchase.
“That project went belly up, so it was a bit of a red flag,” he said, adding: “The market is so tough right now, and buyers are not falling for the fluff.”
Recently, Dinani saw a Surrey developer offering a “buyback” program so buyers can sell their unit back to the developer at the same price if they want to walk away at closing.
Canada Mortgage and Housing Corporation recently estimated that there are 2,500 unsold newly built condos in Metro Vancouver, with some projections suggesting that could climb to 3,500 by year-end.
“Imagine when those come to market in the next 12 months, unsold,” said Dinani. “You’re going to see the prices probably get even softer and the incentives get even more aggressive.”
Piquing interest in the pre-sale phase
Developer Apcon Group in Surrey launched a promotion this month for up to $50,000 off the next five sales at its mid-rise development, The Interchange, which is slated to break ground in the spring.
Apcon marketing manager Balraj Rai said their campaign also has a deal for included air conditioning, as well as a program which allows buyers to put down their deposit in increments.
“Affordability and accessibility are reoccurring barriers to entry for homeowners,” said Rai. “We thought it was really an important time for us to be able to offer the savings.”
Rai said despite market challenges, Apcon believes in the fundamentals of The Interchange, which will add 133 units to the walkable, transit-friendlly neighbourhood City Crossing, between Guildford and Surrey City Centre.
“Complementing it with an attractive pricing structure is how we feel confident in our project and moving forward,” she said.
Homes at The Interchange start at $339,900 plus GST.
‘We’re remaining optimistic’
Last week, the Belvedere condo project by Square Nine Developments Inc. went under creditor protection with nearly $40 million owed to creditors, with the application citing “softening” market conditions and some buyers not completing their purchases as the root of its financial trouble.
After buyers started walking away, Square Nine held a 25-per-cent-off flash sale in May, resulting in 38 units being sold for a total of $18.5 million, according to Square Nine’s CCAA application. Still, 40 units remain unsold, and lack of proceeds from those sales meant that Square Nine could not pay off its mortgage, leading its biggest creditor to issue a demand letter, according to documents.
Turri and Rai said Mission Group and Apcon have not faced difficulty with buyers completing their purchases at any of their projects.
Rai said she’s hopeful the market will turn around by the time The Interchange is finished in 2028 or 2029.
“We’re optimistic everything will start to just look up from here,” she said.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.