I think the point is that for market condos, in the event of a depressed market (as we are in now), the CACs establish a floor for cost recovery that prevents market pricing from being lowered.
Yes, developers won't voluntarily give up profits if the market is high, but the CACs appear to have the effect of shifting the breakeven point to a point where affordability is impossible (even if the developer wants to do so, or is forced to by market conditions).
By reference, I cringe at the CAC cost in Vancouver now, because my 1994 condo purchase (resale near Yaletown in a down market) was at $217 per sq ft. (the original HK buyer had paid $281 per sq ft and took a loss).
Last edited by officedweller; Aug 22, 2020 at 1:25 AM.
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