An anticipated development in Vancouver’s River District is no more. Wesgroup Properties has pulled the plug on Ardea, a 204-unit, multi-building project. The company said in a statement that “higher-than-anticipated construction and delivery costs specific to this project” were at play. Brendon Ogmundson, the chief economist for the B.C Real Estate Association, said this should be a cautionary tale. “I think it’s just really reflective of the conditions for developers right now in B.C. (and) in a lot of larger markets,” Ogmundson said. He added Wesgroup’s reasoning wasn’t surprising, given the current landscape for developers. “We have what I think has been accurately described as a cost of delivery crisis,” Ogmundson said. He explained slow market conditions and rising costs of materials, labour, taxes, fees and delays don’t contribute to an environment in which developers can thrive. “At current prices, with costs rising, we need somehow to make these projects make economic sense,” he said. Right now, Ogmundson said, some developers are experiencing an excess of inventory. “They can’t sell their existing inventory, then it just pushes out the problem further and further,” he said. In a statement, Wesgroup Properties said it will bring forward a new project that is more viable. It added purchasers will have their deposits returned to them in full, as per the terms of their agreements.
