The Rising Costs of Presale Homes
As Vancouver's housing market continues to evolve, new regulations and rising fees are poised to further impact the cost of presale homes. Beginning on March 10, 2025, significant changes to the BC Building Code will require new residential and mixed-use buildings to include adaptability features designed to accommodate aging populations and those with mobility challenges. Simultaneously, Metro Vancouver’s adjusted Development Cost Charges (DCCs) are set to increase - in some cases by almost 300% - raising the costs of land development and infrastructure. These shifts will inevitably affect both developers and buyers, with a ripple effect on housing affordability and market dynamics.
Here’s how these upcoming changes are influencing presale costs and the overall real estate landscape:
Upfront Cost Increases for Developers
- Adaptability Design Requirements:
- Flexible Design Requirements & Higher Material Costs: The new adaptability rules will require developers to design units that can be easily modified to meet residents' needs as they age or face mobility challenges. This includes features such as reinforced walls for grab bars, wider door frames, lower electrical outlets, and flexible plumbing arrangements for future bathroom or kitchen changes. Incorporating these design elements will increase upfront costs, raising design complexity as well as higher hard costs such as materials and specialized labour.
- Layout Constraints, Lower Unit Density & Loss of Usable Space: Designing adaptable units may require larger units to allow space for future modifications. For example, wider hallways or larger bathrooms that can accommodate wheelchair access may be necessary. This could reduce the number of units that can be built on a site, decreasing the overall density or sellable square footage and impacting potential revenue.
- Higher DCC Rates: Metro Vancouver’s rising DCCs, which fund infrastructure like water and parks, will increase upfront construction expenses, pushing home prices higher as developers pass these costs on to buyers. Increases will be imposed over 3-years, with developers feeling the full effect by January 1, 2027. As an example, for new apartment developments on the North Shore:
- Water DCC's will increase from $4,261 to $12,223 (per unit)
- Liquid Waste DCC's will increase from $2,030 to $7,111 (per unit)
- Parkland Acquisition DCC's are being introduced resulting in new charges of $1,199 (per unit)
Pressure on Housing Affordability & New Build Inventory
- Affordability Challenges: With higher DCCs and additional construction costs, home prices are expected to rise further, making it even harder for first-time buyers or lower-income families to enter the market.
- Luxury vs. Affordable Segments: Developers of high-end properties may be better able to absorb these costs, while affordable housing projects may struggle, potentially decreasing the availability of budget-friendly homes.
- Potential Delays
- Design and Approval Delays: Ensuring compliance with the new regulations can introduce delays in both design and approval stages. Local governments may take longer to approve projects as they assess compliance with the new code, especially as developers begin to navigate these new changes.
- Subcontractor Training and Availability: Some contractors may not yet be familiar with the new accessibility requirements, leading to slower implementation or a need to seek more specialized workers, which could delay construction schedules and increase labor costs.
- Fewer New Projects: With the increase in DCCs, some developers may choose to delay or cancel new projects, particularly if the additional costs make the project less financially viable. This could lead to a reduction in the volume of new home construction, which would further tighten the housing supply in Metro Vancouver, exacerbating the supply-demand imbalance. Reduced supply often leads to increased home prices in the market, driving up the value of existing homes and new homes alike.
It's important to recognize the more positive long-term benefits as a result of these changes.
Increased Housing Inclusivity
- Attracting a Broader Demographic: By requiring features that accommodate a wider range of needs, the new code promotes inclusivity. This allows individuals with mobility challenges, seniors, and families with young children to live more comfortably in their homes.
- Aging in Place: Adaptable homes enable older adults to remain in their homes longer, reducing the need for costly assisted living arrangements. This fosters independence and supports the emotional well-being of seniors.
- Future Proofing Homes: The adaptability requirements allow homes to be modified easily as residents’ needs change over time. By building with adaptability in mind from the start, future homeowners can avoid costly future renovations or retrofits.
Improved Infrastructure
If the recent rain event across British Columbia was any indication, improved infrastructure is needed. If used for their intent and purpose, the increase in Metro Vancouver’s DCCs will provide crucial funding for enhancing and expanding the region’s infrastructure, ensuring it can support the growing population by:
- Expanding Public Transit
- Road Improvements
- Modernized Water Infrastructure
- Enhanced Sewage Treatment
- Expanded Green Spaces and Recreation Areas
While the upcoming changes to the British Columbia Building Code and the rising Development Cost Charges (DCCs) in Metro Vancouver are set to bring many positive benefits—like making homes more accessible for everyone and improving local infrastructure—we must face a tough reality: the cost of building new homes is going to go up. Developers will have to invest more to meet the new requirements and cover the increased fees, which means they will likely pass those costs on to buyers.
Are you considering purchasing a presale home? Now may be the best time to act. Buying a home before these changes take full effect can help you avoid the anticipated price increases and secure a better deal. By getting ahead of these rising costs, you can position yourself to benefit from the long-term advantages of the new regulations. As we move forward, it’s essential to find a way to balance these new rules with the need for homes that are still within reach for everyone, but acting now could provide some financial relief before the inevitable price hikes hit the market.
Reach out below to our hyper-local team at Rossetti Realty to learn more about these changes, or to meet with one of our team members to discuss your real estate goals!
Learn More:
British Columbia 2024 Building Code >>
British Columbia Accessibility Changes >>
Metro Vancouver Development Cost Charge Amendments >>
Matt Council PREC*
Rossetti Realty
matt@rossettirealty.ca
604-317-4464