A new comparison of Canadian housing markets puts a striking number on Vancouver’s affordability problem. From 2018 through 2025, newly built single-detached homes in the Vancouver census metropolitan area sold for an average of 4.7 times their estimated physical construction value, according to a Fraser Institute study released October 27. Calgary’s multiple was 1.9.
The difference is dramatic, but it needs context. The study uses building-permit values as its construction-cost proxy, and those values do not include land. They also are not the same thing as a developer’s complete cost ledger. Even with that limitation, the Vancouver-Calgary divide points to a deeper issue: in some Canadian markets, the price of a new house is being shaped far more by scarce land, development economics, charges and supply constraints than by lumber, concrete and labour alone.
The 4.7× Gap Makes Vancouver a National Outlier
The Fraser Institute compared sale prices for new single-detached homes with building-permit values between 2018 and 2025. Vancouver produced the largest multiple in the country at 4.7. Calgary came in at 1.9, Toronto at 2.0 and Ottawa at 1.8, while the cross-city figure cited in the study was 1.7. Vancouver was therefore not simply expensive in absolute dollars: its sale price was unusually disconnected from the permit-based value of the physical structure compared with other markets.
That gap matters because the structure is only one component of what a buyer pays. Land, financing, municipal charges, servicing, approvals and project economics all sit around the physical build. In a market where the final price is 4.7 times the permit value, those non-structure components become impossible to ignore. The study treats the multiple as a signal to investigate what happens beyond the construction site, not proof that any single cost is responsible.
Calgary Shows a Very Different New-Home Market
The contrast is visible in government data. Statistics Canada’s New Housing Market Report put the average price of a new single-detached home in the fourth quarter of 2025 at $2,043,800 in Vancouver and $759,800 in Calgary. Those are average asking prices, using sale prices when list prices were unavailable, so they are not a constant-quality price index. Even with that caveat, the scale of the difference is difficult to miss.
Calgary also produced far more detached housing. CMHC recorded 6,688 single-detached starts in the Calgary CMA in 2025, compared with 2,138 in Vancouver. Total starts were almost identical—27,684 in Calgary and 27,185 in Vancouver—but the mix was radically different. A family looking for a newly built detached house was entering a market where Calgary created more than three times as many such units, despite the two metro areas starting roughly the same total number of homes.
“Construction Cost” Does Not Mean the Builder’s Total Cost
The most important technical detail is what counts as construction cost. The study uses building-permit values as an estimate of the physical cost of constructing the home. Statistics Canada describes permit data as construction intentions. Its methodology says permit values include materials, labour, profit and overhead, while land is excluded. The current Building Permits program also says no adjustment is made for permit undervaluation or construction undertaken without a permit.
That distinction prevents a misleading interpretation of the 4.7 multiple. The difference between a Vancouver home’s selling price and permit value cannot simply be called developer profit. A project may also carry land acquisition, financing, site preparation, professional work, municipal obligations and holding risk. Permit values are useful for comparing markets, but they are not audited all-in development budgets. The ratio is best treated as a diagnostic measure of the gap between structure value and market price, not a profit-margin calculation.
Land Is a Major Missing Piece in the Simple Ratio
Vancouver’s geography makes the exclusion of land especially consequential. In a major CMHC examination of housing supply constraints, only 34.08% of land in the Vancouver area studied was classified as developable, compared with 94.56% around Calgary. CMHC described Calgary as constrained by regulation but not geography. Vancouver, by contrast, faces a tighter physical setting, with water, mountains and protected or unavailable land limiting where expansion can occur.
Earlier C.D. Howe Institute research reached a similar finding from a different dataset. For 2011 through 2021, it estimated that the average market price of a new single-detached Vancouver home exceeded physical construction cost by about $1.266 million, roughly 63% of the final sale price. That estimate is not directly interchangeable with the Fraser Institute’s 2018–2025 ratio, but it shows the wide Vancouver gap is not new. When land is scarce and expensive, leaving it outside the construction denominator can produce a very large multiple.
Government Charges Add Another Layer to Development Economics
Municipal and regional charges are another part of the price stack, although their importance varies by housing type. CMHC’s 2022 work found government charges could exceed 20% of total construction cost in some major-city scenarios, with Vancouver and Toronto generally at the high end. For a single-detached Vancouver scenario, however, the share was about 3.7%—an important reminder that charges alone cannot explain a 4.7 multiple for detached homes.
The pressure has not disappeared. In June 2026, CMHC reported that development charges across Metro Vancouver municipalities had risen roughly 10% since its previous release, largely because of regional increases. Vancouver City Council had already approved a temporary 20% reduction in development cost levies in December 2025 to improve project feasibility. City officials said the broader measures could affect more than 250 active projects representing over 20,000 homes, illustrating how seriously local government is treating development viability.
British Columbia Dominates the High-Gap End of the Ranking
Vancouver is the clear outlier, but the study also found a broader British Columbia pattern. Four of the five highest sale-price-to-construction-value multiples were in the province. Vancouver led at 4.7, followed among B.C. markets by Victoria at 2.4, Chilliwack at 2.3 and Abbotsford–Mission at 2.2. By comparison, Toronto was at 2.0, Calgary at 1.9 and Montréal at 1.5.
That concentration suggests Vancouver’s result cannot be understood only as a story about one municipality. Provincial land-use rules, regional infrastructure, geography, local approvals and metropolitan demand can interact differently across B.C. At the same time, Vancouver’s 4.7 multiple sits so far above the other B.C. markets that local conditions still matter enormously. Victoria, Chilliwack and Abbotsford–Mission share some provincial pressures, yet none came close to Vancouver’s spread. The result points toward a wider examination of the cost structure surrounding detached housing in coastal British Columbia.
Vancouver Is Building Housing, Just Not Many Detached Homes
The Vancouver region is not a place where construction has stopped. CMHC counted 27,185 total housing starts in the CMA in 2025, only slightly fewer than Calgary’s 27,684. The difference is what was built. Just 2,138 Vancouver starts were single-detached homes, while 25,047 were other types. Statistics Canada separately found condominium apartments represented 74% of Vancouver’s for-sale housing starts in 2025, with row houses the dominant single-family form.
That mix reflects the reality of fitting more households into a land-constrained region, but it changes the experience of buyers seeking ground-oriented ownership. A newly built detached house becomes a scarce product within the supply pipeline. The shift continued into 2026: CMHC says purpose-built rental apartments now account for about 60% of Vancouver-area housing starts, up from less than 20% a decade earlier. More rental supply can improve one part of affordability while the ownership market faces a thinner pipeline.
High Selling Prices Do Not Mean Builders Have an Easy Market
A huge gap between permit value and sale price can invite the assumption that developers capture the difference. Current conditions present a more complicated picture. The City of Vancouver said in late 2025 that more than 250 active projects, representing over 20,000 homes, could benefit from measures designed to improve feasibility. CMHC’s 2026 outlook likewise said projects were being squeezed by high construction costs, weaker demand and a steep decline in condominium presales.
By September 2026, CMHC reported that Vancouver condominium starts had fallen another 40% in the first half of the year, producing the weakest first half since 2011. Developers were increasingly favouring purpose-built rentals supported by different financing and policy structures. That does not erase the affordability problem facing buyers; it shows why the gap cannot be reduced to a simple “cost versus markup” story. Expensive land, financing exposure, charges and weak presales can coexist with extremely high end prices while still making some projects financially unworkable.
What the Study Can—and Cannot—Prove
The study’s strongest contribution is comparative. Using the same general metric across cities, it shows Vancouver’s relationship between home sale prices and permit-based construction values is unusually wide. It points policymakers toward areas worth examining: land availability, regulation, approval processes and government charges. What it cannot do is assign a precise percentage of Vancouver’s 4.7 multiple to each factor, because the permit-value denominator excludes land and does not represent every development expense.
CMHC evidence reinforces the idea that there is no single lever. Its 2026 viability modeling estimated that cutting development charges by 50% to 60% would increase viable Vancouver projects by about 5.39%, while reductions of 90% to 100% would raise viability by about 9.01%. CMHC cautioned that eliminating development charges alone would not solve the housing crisis. Vancouver’s affordability challenge is better understood as a stack of constraints. The headline ratio makes that stack visible; policy work begins with determining which layers can realistically be reduced without simply shifting costs elsewhere.
