The 60-storey Ritz-Carlton tower in Vancouver was scheduled for completion in 2011 before the project was suspended. (Holborn Group)

The luxurious Ritz-Carlton hotel and condominium project in downtown Vancouver will not be completed as planned, the developer said Tuesday.

Holborn Group president Joo Kim Tiah said buyers of all pre-sold condo units will get their money back, but he refused to say the more than $500-million project is dead.

"I do not like it when people say the project is dead because we are committed to doing something on the site," he told CBC News in an interview Tuesday.

Tiah said the decision will give the company time and flexibility to re-evaluate the project.

The 60-storey tower, which twists 45 degrees as it rises, is an Arthur Erickson design. It features a high-end Ritz-Carlton hotel on the lower floors and 123 luxury condos on the upper floors priced between $2.5 million and $10 million, with the penthouse priced at $28 million.

Last October, Holborn Group halted construction at the site, in the 1100 block of West Georgia Street, citing reasons of design changes to the parkade but not financial concerns.

Holborn Group president Joo Kim Tiah says the Ritz-Carlton project was put on hold because they had not met sales targets. (CBC)

Tiah said Tuesday the project was "put on hold" because they had not achieved the sales that they wanted. Only 62 of the 123 condos in the tower had been sold, not enough for the developer to move ahead and complete the project by 2011, he said.

The developer is sending letters to the buyers this week, informing them their contracts have been cancelled and their deposits will be returned.

Bob Rennie, a marketer for the project, said the global economic downturn has affected the luxury housing market.

What happened to the Ritz-Carlton could be the beginning of a wave of failures for other condo projects in Metro Vancouver, said Trevor Boddy, an architecture critic and consultant for urban design in Vancouver.

"The failure of the Ritz-Carlton is the tip of the iceberg. It's the first very large tree to fall downtown, and there will be a number of others. It's a bit like Stanley Park in a storm," Boddy said.

Rennie said property development projects will go ahead, but developers will have to refocus on what's important to homebuyers in future.

"What's going to bring us out of this new economy? Is it affordability or is it luxury? I think there is really going to be a focus on affordability," he said.