$2,800 a Foot: How Vancouver Presale Pricing Lost the Plot, and How to Spot the Next One

In May, a condo at Westbank’s Butterfly sold. It was the first resale in the building to close on MLS. It had been bought presale for $2,561,000 plus GST. It sold for $1,518,000.

That is a gap of just over a million dollars, and the real damage is worse, because the original buyer also paid GST, property transfer tax, and eventually realtor and legal fees on the way out. Call it roughly ten percent on top.

The million dollar number is what gets shared. It is not the number that should interest you. This one should: that sale prices the building at about $1,425 per square foot. The building’s average presale price, per Altus Group, was about $2,800 per square foot.

The market repriced this real estate at roughly half of what it originally sold for. That is not a story about one seller’s bad luck. That is a story about a price that was never anchored to anything.

First, the honest caveats

I want to be careful here, because there is a difference between analysis and a pile-on.

This is one closed trade. One. Westbank’s position, given to Daily Hive, is that resale listings like these are outliers driven by sellers’ personal circumstances rather than the building’s value, that several sales over the past year were not recorded on MLS, and that Butterfly continues to sell at some of the highest prices per square foot in the city. The “outlier” framing is self-serving, but the underlying point is fair: you cannot draw a trend line through a single dot, and I do not have visibility into the private sales.

I also sell presale condos and townhomes for a living. An article arguing that presale buyers overpaid is an article arguing that people in my business helped them do it. So take the following as someone describing a machine he works inside, not as someone throwing rocks from outside it.

With that said, the single dot sits inside a pattern that is harder to wave off.

It is not one unlucky seller

According to an affidavit from a former employee lawsuit, first reported by Bloomberg, Westbank’s Alberni by Kengo Kuma has many unsold units and vendor take back mortgages outstanding, while Butterfly itself is well over budget with closings that are slow and uncertain. Vendor take back mortgages are worth pausing on: that is the developer lending the buyer money to complete the purchase. It is a tool you reach for when buyers cannot or will not close at the contract price.

Meanwhile, Westbank’s Joyce 2, a 35 storey, 360 unit rental tower, went into receivership this spring. The filings are specific. OPTrust said the loan matured December 31, 2025, that National Bank issued a demand in January after at least six defaults, that a cost consultant estimated $15.5 million in overruns, and that as of March 19 it was owed $109,211,965 with default interest running at $60,136 a day.

Three different symptoms, one underlying condition: the revenue assumptions did not survive contact with the market.

And this is not confined to one developer. CMHC’s own outlook says a significant decline in condominium presales in Vancouver and Victoria has stalled many planned projects, and expects more to be postponed or cancelled in 2026 with effects running into 2027 and 2028. Steve Saretsky has documented an assignment market so illiquid that realtors stopped taking the listings. Westbank is the most visible case because it built the most visible buildings. It is not the disease.

So how did $2,800 a foot ever make sense?

This is the part most coverage skips, because “buyers were greedy idiots” is easier to write. They weren’t. Every leg of that price had a real argument behind it at the time.

Architecture was sold as an asset class. Not a home with nice design, but a piece of art you could live in, by a name architect, singular and unrepeatable. The implicit promise was that scarcity of design translates into scarcity of value. Nobody ever wrote that promise down, because it cannot be underwritten.

Scarcity was framed as permanent. Land is finite, the city won’t approve towers like this again, the West End will never build another Butterfly. All true. None of it means a buyer will exist at $2,800 a foot in 2026.

The exit door was the product. For most of the last cycle you did not need an end user to justify the price, because you could assign the contract before completion to the next person who believed the same thing. Presale pricing was underwritten by the assignment market, not by the resale market. That worked exactly as long as assignments stayed liquid.

Money was nearly free, and then it wasn’t. Foreign buyer, speculation, and empty homes taxes drained the international trophy bid over several years. Then the Bank of Canada’s 2022 rate shock removed the cheap leverage. The bid did not soften. It left.

Put those together and you get the honest description of what a $2,800 per foot presale actually was: not a price, but a bet that someone else would pay more before you had to close. When the assignment market froze, buyers discovered what they had really bought, which was an obligation to complete at a number set in a different universe. The completion date does not negotiate. It just arrives.

The actual question: is it a good project, or a well marketed one?

Here is what I would tell a client today, and what I wish more people had been told in 2018.

Look at the spread, not the price. Compare the presale price per foot to what finished, comparable product sells for in that same neighbourhood right now. If a presale asks 40% more than the resale market next door, that spread is not a bonus. It is the risk. You are pre paying for appreciation that has to actually happen. Sometimes a modest premium is defensible for new construction, warranty, and a genuinely better location. Double is not a premium. It is a bet.

Ask who the buyer is at completion, not today. Every project has a story about who wants it. Ask what happens if that buyer is gone in four years. If the honest answer is that only an investor would want this unit, and investors have left the presale market, you have a problem with no floor under it.

Separate the concrete from the brochure. Good design genuinely holds value. What does not reliably resell is the marketing narrative wrapped around it. A useful test: strip out the architect’s name, the renderings, the sales centre, and the launch event. Would you pay this per foot for this floorplan, in this location, at this quality? If the answer is no, you are buying the story.

Underwrite the developer’s balance sheet, not their brand. Prestige is not solvency. Ask about the lender, whether the project is financed to completion, and what their recent completions actually closed at. Vendor take back mortgages and quiet bulk sales are a tell.

Assume you cannot assign. Not “assume it’s hard.” Assume the door is welded shut and you will complete this purchase with your own financing, in whatever market exists on that date. If the deal only works if you can flip it, you don’t have a deal.

The finished today test. If this building were standing right now, complete, and offered to you at this price, would you buy it? If you would only buy it because it is not built yet and might be worth more later, you are not buying real estate. You are buying time, and time is the one thing presale contracts are worst at protecting.

The point

Hype is not the enemy. Great buildings deserve great marketing, and Vancouver is genuinely better for having ambitious architecture in it. The Butterfly is a beautiful thing and will still be beautiful in fifty years.

The problem was never the hype. It was that at some point the hype stopped being the wrapper around the price and became the reason for it. When that happens, the building can be everything the brochure promised and the buyer still loses a million dollars, because they weren’t paying for the building.

Ask what you are actually paying for. If a meaningful part of the answer is “the feeling in this sales centre,” walk out and think about it for a week. The good projects will still be there.

If you are evaluating a specific presale and want a second set of eyes on the numbers, get in touch. I will tell you when the math doesn’t work, including on projects I represent.