Vancouver home prices took a sharp dive in January, hitting a two-year low, while Canada’s GDP shrank in November, signaling potential economic trouble ahead. Adding to the uncertainty, looming tariffs could push housing costs even higher, leaving both buyers and sellers wondering what’s next. If you’re planning to enter the market in 2025, this episode is essential as we break down the data and what it means for you.

The market is facing some serious headwinds and the threat of Tariffs is ever present. The potential for a 25% Tariff on key building materials like windows, drywall, and appliances would drive up construction costs, making new homes even more expensive. While a temporary 30-day pause has been put in place, tariffs could still take effect at any time. Earlier this week, when they seemed imminent, BMO’s chief economist projected 0% GDP growth for 2025, 8% unemployment, and aggressive interest rate cuts down to 1.5%. The Canadian dollar briefly hit a 23-year low, and the 5-year bond yield dropped to a 30-month low, signaling lower mortgage rates ahead. In fact, 5-year fixed mortgage rates are already available at 3.89%, a sharp decline from last year.

The BC Real Estate Association has painted a stark picture of what could happen if tariffs are imposed and Canada retaliates. They predict home sales could drop 30%, while active listings could rise 40%, leading to a more prolonged buyer’s market. Mortgage rates could climb to 6% by 2026, and while prices are still expected to rise, they would increase at a much slower pace. With so much uncertainty, many buyers and sellers may wait on the sidelines, similar to the early days of the pandemic.

At the same time, Vancouver’s housing market is seeing some surprising shifts. January sales were up 9% year-over-year, marking the strongest January in three years. But new listings surged 46% compared to last year, reaching one of the highest January levels on record. Inventory is climbing quickly, hitting 11,100 active listings, a 33% increase over last year. The last time inventory was this high in January was 2019, a year when prices declined slightly. The sales-to-active listings ratio now sits at 14%, confirming that we remain in a balanced market, but momentum is shifting.

Perhaps the biggest red flag is price movement. While the HPI benchmark price showed a slight increase in January, more immediate indicators tell a different story. Median prices dropped by $80,000, the largest single-month decline in 18 months, while average prices fell by $70,000, hitting their lowest level in two years. These sharp drops suggest that sellers may be adjusting expectations, while buyers hesitate to make moves in an uncertain environment.

So, what’s next? With sellers eager to offload properties and buyers waiting for more clarity on tariffs and interest rates, the spring market could be weaker than expected. Early February sales trends suggest a slower start, but as we approach the peak season, things could shift. Will prices stabilize, or are we heading into a prolonged downturn? Tune in as we analyze what’s happening in Vancouver real estate and where the market might be headed next.

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Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com

www.thevancouverlife.com

In this special episode of the Vancouver Life Real Estate Podcast, we welcome Doug Porter, Chief Economist at BMO Financial Group, to provide unparalleled insights into Canada’s economic landscape. With over 30 years of experience and a proven track record as one of the top economic forecasters in North America, Doug shares his expert analysis on the Bank of Canada’s recent rate cut and its potential ripple effects across the economy, financial markets, and the Canadian housing sector.

We dive into hot-button topics like the impact of immigration policy changes on housing affordability, the long-term economic consequences of tariffs, and the evolving lending landscape in Canada. Doug also unpacks how the so-called “mortgage renewal cliff” may not be as alarming as it sounds, highlighting how Canadians are adapting to higher interest rates.

From analyzing regional housing trends—like Vancouver’s surprising resilience compared to Toronto’s cooling condo market—to exploring the broader implications of geopolitical tensions, this episode is packed with actionable insights for homeowners, investors, and anyone curious about Canada’s economic outlook.

Doug’s practical advice for buyers, his predictions for interest rates, and his views on what Canada must do to foster economic stability make this an episode you don’t want to miss. Whether you're planning your next real estate move or simply want to understand the forces shaping Canada’s financial future, this conversation will leave you informed and inspired.

Tune in now and gain a deeper understanding of the market trends that matter most.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com

www.thevancouverlife.com

The final numbers for Canada’s housing market in 2024 are in, and they've revealed some unexpected trends. Despite challenges such as high interest rates and declining housing starts, national home prices rose by 2.5% last year, bringing the average home price to $676,640. Every province and territory saw price increases except for Ontario, which experienced a modest 1.7% decline. The Northwest Territories led the nation with a remarkable 34.8% price increase, followed by New Brunswick at 15.5% and the Yukon at 12.8%. British Columbia also performed well, with home prices rising by 5.9%, while Alberta saw solid growth of 9.4%.

Ontario’s slight decline, however, masks significant issues in the pre-construction condo market, particularly in Toronto, where sales hit a 28-year low in 2024. Newly constructed condos flooded the market, driving prices down by 10-15% or more in some cases as sellers undercut each other. Yet, when viewed at the provincial level, Ontario’s overall housing market showed resilience, with a decline that remains manageable by most standards.

Meanwhile, inflation continues to ease, as the latest Consumer Price Index (CPI) print came in at 1.8%—the second-lowest reading in 46 months. This marks a slight decline from December’s 1.9% and the 16th consecutive month of cooling mortgage interest costs, which dropped from 13.2% to 11.6%. Rent inflation also eased, falling from 7.7% to 7.1%.

Inflation has now remained within the Bank of Canada’s target range for 12 straight months, with the broader CPI reading excluding mortgage interest costs coming in at just 1.3%. These metrics, coupled with a strong employment report, suggest the Bank of Canada may lower interest rates at its next meeting, with markets currently pricing in a 0.25% cut that would bring the overnight rate to 3%, its lowest level since August 2022.

This data reinforces the importance of understanding how hyper-local real estate markets operate. For instance, in Vancouver’s Mount Pleasant East neighborhood, half duplexes reached their highest prices ever in 2024, climbing 7% above the 2022 peak. By contrast, condos in the same area are 3% below their peak prices, and detached homes are down 9%. These variations emphasize the need for precise, localized market insights when making real estate decisions.

Next week we have Mr. Doug Porter, the Chief Economist for the Bank of Montreal coming back on the show to discuss how he sees the Canadian economy shaping up for 2025

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com

www.thevancouverlife.com