Which vala version do you have?

Vala 0.22.1

Hmm. This shouldn't happen since configure checks for vala 0.24:

AM_PROG_VALAC([0.24.0],[],[
  if test "$enable_test_application" != "no"; then
    AC_MSG_ERROR([vala support enabled by vala compiler not found])
  fi])

which should error out if vala < 0.24 when the test application was requested to be built.

I bumped the vapigen requirement to 0.24; sorry, but I didn't see an easier solution. 

Since vala is dying, rewriting the test application in C is on my list for this cycle. Meanwhile, you can use the (uninstalled) testvte programme in $(builddir)/src/ .