Major Vancouver condo project cancelled, experts warn more could follow
One of Vancouver’s biggest developers has pulled the plug on a major condo project, blaming soaring costs and a cooling presale market.
Wesgroup Properties confirmed Wednesday it has cancelled Ardea, a 204-unit waterfront project planned for its River District community in southeast Vancouver.
According to a real estate listing for the project, it was positioned as the community’s “uncommon life on the waterfront,” with plans for hot and cold plunge pools, landscaped pathways, and a new Kinross Park next door.
“Ardea was envisioned as a landmark waterfront community, but higher-than-anticipated construction and delivery costs specific to this project mean that it is no longer viable for us to move forward,” the developers said in a statement sent to Daily Hive Urbanized.
The developer said the decision “wasn’t taken lightly,” and deposits will be refunded in full.
“A cost of delivery crisis”
Industry experts say the cancellation reflects wider challenges facing the condo market.
“The industry is in a cost-of-delivery crisis,” said Adil Dinani, principal at the Dinani Group with Royal LePage West.
“Even Wesgroup’s attractive land cost couldn’t save this project. Bloated municipal fees, the cost of capital, and anemic buyer demand for presale condos likely factored into this decision.”
Dinani told Daily Hive Urbanized that buyers and sellers have been adjusting expectations in recent months.
“We’re seeing more sales at lower prices, which is encouraging as we head into a seasonally active time in the market,” he told Daily Hive Urbanized.
“With a rate cut on the horizon and supply levels slowly shrinking, we could find ourselves in a more stable pricing environment for the balance of the year.”
Interest rates and falling rents
Tom Davidoff, an associate professor at UBC’s Sauder School of Business, told Daily Hive Urbanized that the cancellation highlights how quickly once-profitable projects can become unviable.
“It’s not surprising that a project that used to make sense no longer makes sense,” he said.
“Rents have fallen, and interest rates have risen. When those two things happen together, the value of new buildings falls. What looked profitable a few years ago is now a negative net present value project.”
He added that the broader conditions for developers have shifted dramatically.
“A few years ago, developers were building in an environment of low interest rates, high immigration, and rising rents. Today, it’s the opposite: high interest rates, lower immigration, and falling rents.”
Davidoff said lower borrowing costs, stronger immigration, and a healthier economy would be needed to restore feasibility for developers.
What it means for buyers
While presale launches are slowing, Davidoff said resale buyers could see more opportunities.
“Condo values are falling, so buying an existing unit or one that’s just completing may be cheaper,” he explained.
“But it’s going to be hard to find a lot of presales starting up now, because developers simply can’t sell at high enough prices to justify today’s land and construction costs.”
Map of Vancouver’s River District, where Wesgroup cancelled its planned Ardea condo project. (wesgroup.ca)
Despite cancelling Ardea, Wesgroup emphasized it remains committed to the River District, a 130-acre master-planned community it has been building for over a decade.
“We are reassessing our plans for the Ardea site and will bring forward a new project that is more viable,” Wesgroup said.
And with more rate cuts and market shifts looming, the big question is whether Ardea’s cancellation is a one-off or just the start of what’s to come.
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