The Construction CRASH Has Started — And It’s Worse Than You Think

The construction crash in Vancouver

isn't something that might happened. It

has already started and it will have

lasting consequences for years to come.

Just a few years ago, we were in one of

the biggest construction booms this

country has ever seen. Cheap money,

record pre-sale demand, and developers

launching projects left and right. It

felt like the building would never stop.

But today, the situation has completely

flipped. We are on the other side of

this extreme where we experienced one of

the slowest real estate markets on

record. And in Toronto, the biggest city

in Canada, in the first quarter of 2026,

there were zero new projects launched.

And here in Vancouver, the pre-sale

industry has collapsed to one of the

lowest levels we have ever seen. The

builders are in a survival mode. And

when the construction slows down this

fast, it doesn't just affect the

developers. It affects the entire

system. Homebuilders, buyers,

homeowners, and future supply. Some of

the effects are obvious, others are

quietly happening in the background, and

most people don't know about them yet.

So, in today's video, let's break down

10 effects that are happening from this

construction crash. We'll start with the

most obvious and work our way to the

most surprising, the ones that you might

not expect. The very first effect we can

expect from this is of course many

projects being cancelled. We are already

seeing a fallout from this in real time.

A lot of developers are postponing their

projects too far into the future once

the market recovers. if it recovers. At

the current market conditions, we have a

lot of already built inventory that

developers have hard time selling out,

let alone think about starting new

projects. They can't sell 20 30% of the

building, let alone 60 70% like they

need to in order to start on

construction. So, a lot of these

projects are quietly getting cancelled

in the background because developers

cannot sell enough units in order to get

construction loans. Number two,

developers going bankrupt. Again, we

have seen several headlines of pretty

big developers going bankrupt, several

different projects going bankrupt in the

middle of construction. This is not

exactly brand new, but it's happening at

a much larger scale. A lot of developers

are citing higher interest rates.

They're citing higher building costs,

but the reality is that the market just

shifted and they cannot sell out these

units in days anymore. They're having

problems with completions. Yes, in some

cases the construction costs have ramped

up pretty high and they are in this

survival mode. A lot of them are not

even able to survive. This brings us to

the next phase of the market fallout,

the damage. And the first thing to go

are construction jobs. We will see

massive layoffs and layoffs that we

haven't seen in many years. I don't mean

to be pessimistic, but that's just the

reality of what's happening. When you go

from a huge market boom where we had a

big shortage of construction jobs, a lot

of growth in this industry, a lot of

companies were growing, a lot of

companies were hiring to all of the

sudden you go to the other extreme where

you have extreme slowdown, something

that we haven't seen probably ever or at

least since '90s. All of the sudden you

have all these newly created jobs, newly

created companies no longer needing

workers or at least not needing as many

workers. So just the volume of jobs that

was created will have to disappear and

that will be a lot of pain in a

construction industry. We are already

starting to see this fallout and

unfortunately it will continue. The next

effect is delay on completions. As

developers don't have as many projects

on the go, they will slow down the

construction on the current projects.

First of all, they need to keep people

employed. They have to stay in business.

And since there's not another project

lined up, the builders, the

subcontractors will slow down all their

work, which will delay completions. I am

starting to see that firsthand. A lot of

projects that were supposed to complete

at the beginning of 2026 are now

completing at the end of 2026 or

beginning of 2027. There is a lot of

delays in the construction industry. And

I think it's just developers being in

this survival mode trying to keep people

busy uh without having to actually

complete any projects yet. They're

hoping for the recovery of the market

which so far hasn't paid off. The next

effect is worse construction quality.

Now, this is a very unfortunate effect

and it will happen with some developers,

not all developers. We can't make

blanket statements here, but we can

expect at least in some capacity

developers to start cutting corners.

They know the reality of the current

market. They also know that they're not

making as much money. In some cases,

they're losing money. They also don't

have any projects lined up in the

future. and unfortunately they start

cutting corners. I've heard and seen

some horror stories. We of course have

the leaky condo situation in Vancouver

before we had the construction boom

during the Olympics and that created a

lot of fallout in the construction

industry. And I think we're in for

another wave of poor construction

quality. Some developers will be doing

this more than others and especially

smaller builders, builders of

multiplexes. detached houses, duplexes,

uh you have to be really careful if you

are in a market for one of these

properties. Make sure you get proper

inspections. Make sure you do the proper

walkthroughs because um I have a feeling

that this is going to be a pretty big

issue. And here's the sixth effect that

I wanted to highlight. Lawsuits. Because

of this poor construction quality, we

are likely to see more lawsuits between

stratas and builders, between homeowners

and insurance companies, and homeowners

and warranty companies. As you know,

there's the 2510 warranty on all new

builds in uh Greater Vancouver. However,

if you do have a problem, sometimes it's

not as easy to get that problem fixed.

There is a lawsuit involved most of the

time. And I think we will see a lot of

lawsuits happening because of that. On

the other hand, speaking of lawsuits, we

will also see a lot of contractors sue

developers. And this is already

happening in a background. Like for

instance, there is this big lawsuit of a

million dollars happening between a

subcontractor and the developer where

the developer did not pay their bills.

Again, as developers make less money,

they're going to cut corners. They're

going to try to get away with more

stuff. And this will lead to more

lawsuits because right now the way the

construction industry is sort of

structured in Vancouver is that you have

the developer, the sort of big builder,

but there's sort of a general

contractor. They have office staff, they

have architects, but they subcontract

most of the work. So for instance, they

subcontract windows to a window

installation company. They would

subcontract framing to the framing

company, concrete to the concrete

subcontractor, etc., etc., etc., etc.

So, all of these subcontractors are not

direct employees of the developer,

they're the subcontractor. And when

these companies don't get paid, they

will sue the big developer. And this is

just the beginning. I'm anticipating

more lawsuits like this on top of the

lawsuits that I mentioned between

homeowners and the builders, homeowners

and developers. The next effect we're

seeing is wider industry collapse. There

are already headlines about uh stores

like for example Coastal Appliances