A Luxury Condo Loss Downtown and a Six-Year-Old Building Rotting From the Inside: What Vancouver Condo Buyers Should Check

Before you buy a Vancouver condo, check how it's built, read the minutes and the depreciation report, and price in the strata fee, because what you buy and how it's built decides what you get back. A luxury condo in downtown Vancouver just resold for far less than its owners paid after more than a decade of ownership, and that's before you count REALTOR® fees, property transfer tax and inflation. In the same week, a client sent me photos of his six-year-old wood-frame condo building with its support posts rotted out under the stucco. Both stories point at the same lesson, I think.

This came out of a recent episode of the Coast to Coast Canadian Real Estate podcast, where my co-host Mike covers the Toronto side and I cover Vancouver. We had losses in the millions this time, not the hundreds of thousands, and a building failure neither of us expected to see in a building that young.

Can a downtown Vancouver luxury condo lose money after a decade?

Both of the Vancouver losses I've been tracking lately are in the downtown core, in higher-end luxury builds.

The unit itself is, I'd say, a serious piece of real estate, with the kind of views and finishes buyers pay up for.

What the loss looks like

The sale price came in far below what these owners paid. I'm not printing the exact prices here, but you can look up sold homes yourself on the sold map (free account) with a free account.

When you adjust for REALTOR® fees, property transfer tax and inflation on top of that, I think the real loss is a good deal bigger than the gap in the price. It's shocking to see, and you know, it's one of the biggest dollar losses I've seen here.

Was it a power of sale?

That was my first question too. On any sale like this, pull the title, because a power of sale would show a mortgage charge. When I posted this one on Instagram, a lot of people in the comments said "tax write-off." You don't know what's going on behind the scenes in a sale like this, and I'm not going to guess. What I'll say is that whoever bought it got some very good value.

Where you are inside downtown counts too

I'll be honest with you, this isn't my favourite pocket of downtown. Vancouver is small. You can walk across it in 30 or 40 minutes, so you can still get to the seawall from here. But when you're spending that type of money, I'd want to be closer to the ocean. For lifestyle, the restaurants, the bars and just the vibe of the city, I think pockets like Yaletown are a little bit nicer. This building is kind of right in the middle of it all.

Long-Term Ownership Doesn't Always Protect You

Mike made a point on the episode I agree with. The usual advice is that real estate is a long game: buy for five to 10 years, make sure you're going to live there, and time takes care of the rest. These owners did all of that. They held for more than a decade and still lost money on the price.

I don't think that means long-term ownership is wrong. It means the purchase price and the product you buy carry most of the risk, and holding period can't fix a purchase made at the top of a segment. If you're trying to understand where your own property sits today, the Kyle Mark Report tracks it neighbourhood by neighbourhood, and a home estimate is the quickest place to start.

The Toronto Side: A Power of Sale and a Big Drop

Mike brought a loss of his own from Brampton, about 50 minutes outside Toronto, an area a lot of buyers moved to for space while keeping access to the city. A house out there came up in his power of sale tracking, sitting empty.

It came off the market, and it eventually sold as a bank sale for far less than the owners paid. Mike's question was a fair one: when the finished house wouldn't sell at a higher number, what is the land alone really worth?

As a former firefighter, I'll say empty, distressed buildings carry risks of their own, and fires in projects that weren't hitting their numbers aren't a new story. We had a run of wood-frame apartment projects here that were close to finishing and burned down.

A Six-Year-Old Condo With Rotted Support Posts

This is the story that stuck with me most. A client of mine, and thankfully I didn't help him buy this one, purchased at the sales centre in 2018 and moved in during 2020. He texted me photos before he even explained what they were.

The photos showed the lower support posts on the corner of the building. The stucco cladding had been opened up, and the wood underneath was completely blown out. They'd opened up a second balcony as well, and then it looks like they put temporary supports in and called in an engineer, because the building is starting to lean toward that corner. I was shocked there was even wood under that stucco. I'd expected a concrete column.

What likely went wrong

I spent 11 years in construction before real estate, and from the photos I'd say this is a building envelope problem. Stucco is very porous. If there's no proper rainscreen behind it, there's no space for water to drain or for the assembly to dry. The water gets in and has nowhere to go, so those wooden posts sat wet inside the stucco for six years and rotted.

I'd say two posts being exposed is only the start. It's one of four corners. They'll have to open every assembly built the same way, and there's a second building beside it, built at the same time by the same builder, that they'll have to check too. Anything structural is a life safety issue, so it has to be fixed now, ahead of a cold, wet season, not after the lawsuits are sorted out.

Who pays for structural repairs in a strata building?

I don't know exactly how this one plays out, but I think the owners pay first. The strata hires lawyers, the owners fund those lawyers, the builder sues the subtrades, and the blame gets passed around for years. In the meantime the repair gets paid by the owners through special assessments, and they try to claw the money back later. I can't imagine a six-storey building has enough in its reserve fund to cover a project like this.

My client had already been paying $650 a month in strata fees on a one-bedroom-plus-den. We tried to sell it earlier this year, and I'd guess he wishes we'd gone through with it.

What was BC's leaky condo crisis?

Obviously this isn't new to British Columbia. In the 1990s, builders here brought in a California-style stucco assembly without proper rain protection, and a huge share of the wood-frame buildings from that decade rotted from the inside out. The leaky condo crisis came close to bankrupting a couple of municipalities in the Vancouver area.

You'll still see full apartment complexes wrapped in scaffolding today, having their cladding stripped and rebuilt. While that work is underway, lenders won't touch the building. It gets flagged, the only buyer who can purchase is a cash buyer, and one-bedrooms sit on the market at a fraction of what they should fetch and still can't move.

BC's building code now allows wood-frame construction up to six storeys. I don't think that's automatically a problem, but the assembly behind the cladding is everything, and you can't see it on a showing.

Concrete buildings have water problems too

A colleague of mine was dealing with a five- or six-year-old concrete building in Richmond, which sits below sea level behind dikes, so there are no basements. The parkade has had water ingress from hydrostatic pressure for two years and they still can't fix it. When the water behind a foundation wall can't get out, the pressure builds against the foundation, and when it freezes it cracks and weakens the concrete. It's right there in the strata minutes, and a unit in a building like that is very very hard to sell.

Strata Fees That Only Go One Direction

Mike had a client in a low-rise in Ontario whose maintenance fees went from $400 a month after a 2019 purchase to $1,100 a month in 2026, with another water leak under discussion and the board debating a special assessment, a fee increase or a line of credit. Add utilities and property tax, and a mortgage-free owner is spending $2,000 a month to own that condo.

In my experience fees like that don't go backwards. A thousand-dollar fee doesn't drift back down to $500. That shrinks the buyer pool, depending on the building, to people who can carry it without a mortgage, which in that building means downsizers, and a lot of those buyers are selling right now, not buying.

High strata fees aren't automatically bad

I sold a 530 sq ft one-bedroom in the Vancouver House, a building just a couple of years old, where the strata fee was already just under $700 a month. We got creative with the marketing: if we had an offer in the first two weeks, we'd pay the first six months of strata fees on top. It worked.

Context matters, though. An older building charging $600 or $700 a month that has already replaced the roof, the windows, the elevator and the envelope has future-proofed itself for another 20 years. That's a fee I can live with, and that's why I'd look at the age of the building and what's been done in terms of upgrades before I judge the number. A new building charging that much with nothing behind it is a different conversation. Before you buy, you need to read the depreciation report and the minutes, because whatever reservation you have about a building today is the same reservation your buyer will have when you sell.

My strata fees buyer guide goes deeper on reading fees and reserve funds, and the Vault risk check is built to flag the red flags in a building before you write an offer.

What should you check before buying a Vancouver condo?

• Buy concrete when you can. I think it takes the rot risk off the table for the long term. It isn't immune to water issues, but a structural wood failure isn't one of them.
• Read the minutes and the depreciation report, every page. Water ingress, envelope work and special assessment discussions show up there long before they show up in the price.
• Ask what's behind the cladding. On a newer wood-frame building, ask whether there's a rainscreen and who warrants the envelope.
• Price the fee into your purchase. I'd say sometimes spending a little more on a building with a lower fee and the same features is the better buy, and that's often what I'd advise.
• Think about your exit on day one. If your hesitation today is the fee or the building, it'll be your buyer's hesitation too.

If you're starting a search, the buyers page lays out how we approach a purchase, and the mortgage calculator lets you add the strata fee to your monthly cost so you see the real number. If you're a seller in a building with issues like these, the sellers page is where we start that conversation.