Surrey city council last week approved hundreds of new rental units, many of which were previously intended to be condos, illustrating how developers are adapting to changing market conditions.
During a June 23 meeting, Surrey city council approved 758 net new rental units across three projects alone: the GEC Education Mega Centre by Global Education Communities Corp. at 10240 City Parkway, an unnamed project by Tangerine Developments at 137A Street and Whalley Boulevard, and SkyLiving by Allure Ventures Inc. at 100 Avenue and 138A Street.
The GEC Education Mega Centre was revised from a mix of 215 rentals and 168 condos to 387 purpose-built rentals only. Phase 1 of the Tangerine project will now be 379 market rentals instead of the same number of condos, and SkyLiving was revised from 449 condos to a mix of 207 market rentals and 215 condos.
“In response to the current state of the real estate market, specifically presales, the developer has pivoted their approach to meet the project’s proforma requirements,” said a June 23 planning report about SkyLiving’s application.
Council approved all three revisions without comment. The revisions will be subject to housing agreements with the city of up to 60 years, in order to ensure the rental units are used accordingly for decades to come.
One expert said the larger pattern is due to insufficient presale demand and lower consumer confidence amid economic uncertainty.
“In today’s market, it’s just hard to achieve those presale requirements that you need in order to put a shovel in the ground,” said Manraj Dosanjh, real estate advisor with Dexter Realty.
Developers “are looking at the market today and they’re probably looking out maybe another 12, 18, 24 months from now, and they’re just not seeing what they hope to see in terms of a pickup in the highrise sector,” said the Surrey-based Realtor.
Pivoting toward rental could potentially unlock preferential financing terms; qualify for municipal incentives like relaxed community amenity contributions; and avoid interest payments on idle land, he said.
On the other hand, Dosanjh said the shift is not without consequences.
For example, some presale buyers may not realize they are buying into projects that now have large rental components. Also, younger buyers may potentially encounter low inventory in a few years when they are ready to buy.
“They may not be buying right now, but they might be buying in the next five, six, seven years, but the decisions that are being made right now, whether it’s the pivot to the rental that’s happening, we’re going to see a deterioration of ownership condos in the near future,” he said.
Citing industry layoffs and growing shadow inventory, Dosanjh said it may not be until the mid-2030s that significant new condo supply comes online.
“With so much negative talk about how much supply there is currently, it’s shifting perspective and it’s shifting policy to continue to favour rental over the longer term, which I think is just going to be disastrous for younger folk in Metro Vancouver,” he said.
In a February 2025 housing needs report, the City of Surrey determined that by the end of 2028, the city needs at least 20,148 new units for renters and 26,020 new units for owners "in order for all residents to have affordable and appropriate housing." This is neither a target nor an estimate of what will be built, said the report.
