Federal policy changes, provincial housing measures, interest rate decisions, and global economic trends are all contributing to the uncertainty ahead.
Real estate development. Source: Canva
Key Challenges for 2025 The real estate market in B.C. is shaped by supply, demand, and finance. On the supply side, provincial efforts aim to accelerate transit-oriented densification and increase housing stock, particularly missing middle homes.
On the demand side, taxes targeting speculation and flipping continue to impact buyer behavior. Financially, credit markets and monetary policy play critical roles in shaping affordability and real estate activity. Provincially, the NDP government remains focused on affordability initiatives. These include funding a portion of first-time home purchases, doubling the speculation and vacancy tax, and introducing a home-flipping tax.
The latter imposes a 20% tax on homes sold within a year of purchase, decreasing incrementally over two years. At the federal level, potential political shifts in the 2025 election could bring significant changes. A Conservative government might reduce immigration levels further, potentially affecting housing demand. Meanwhile, international issues like U.S. tariffs and monetary policy divergence between the Bank of Canada and the U.S. Federal Reserve add another layer of complexity.
Monetary Policy and Economic Trends Interest rates and the Canadian dollar’s performance are critical to the housing market’s trajectory. A projected reduction in interest rates by mid-2025 could make mortgage financing more accessible, but it also risks driving inflation and price appreciation.
A weaker Canadian dollar could stimulate exports but may worsen affordability if a potential recession occurs.
Local Market Trends Weakness in the presale market persists, while rental supply is expected to increase in the coming years, easing pressure on affordability. Stabilizing rents, combined with slower immigration and new developments, could bring some balance to the market.
Experts like Andy Yan from Simon Fraser University and Thomas Davidoff from UBC suggest the year ahead will require careful observation. With so many interconnected factors, the real estate market is likely to remain volatile. As Yan aptly put it, “It’s one of those strap-in-and-watch kinds of situations.” While 2025 holds challenges, it also presents opportunities for adaptation and long-term growth as the market continues to evolve.
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Home sales registered on the Multiple Listing Service® (MLS®) in Metro Vancouver1 rose over thirty per cent in December, compared to the previous year, signalling strengthening demand-side momentum to close out 2024.
The Greater Vancouver REALTORS® (GVR)2 reports that residential sales in the region totalled 26,561 in 2024, a 1.2 per cent increase from the 26,249 sales recorded in 2023, and a 9.2 per cent decrease from the 29,261 sales in 2022.
Last year’s sales total was 20.9 per cent below the 10-year annual sales average (33,559).
“Looking back on 2024, it could best be described as a pivot year for the market after experiencing such dramatic increases in mortgage rates in the preceding years. With borrowing costs now firmly on the decline, buyers have started to show up in numbers after somewhat of a hiatus – and this renewed strength is now clearly visible in the more recent monthly data.”
Andrew Lis, GVR director of economics and data analytics
Properties listed on the MLS® system in Metro Vancouver totalled 60,388 in 2024. This represents an 18.7 per cent increase compared to the 50,894 properties listed in 2023. This was 9.7 per cent above the 55,047 properties listed in 2022.
The total number of properties listed last year was 5.7 per cent above the region’s 10-year annual average (57,136).
Currently, the total number of homes listed for sale on the MLS® system in Metro Vancouver is 10,948, a 24.4 per cent increase compared to December 2024 (8,802). This total is also 25.3 per cent above the 10-year seasonal average (8,737).
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,171,500. This represents a 0.5 per cent increase over December 2023 and a 0.1 per cent decrease compared to November 2024.
“Disappointingly, sales came in shy of our forecasted target for the year, but the December figures signal an emerging pattern of strength in home sales, building on the momentum seen in previous months,” Lis said.
“These more recent sales figures are now trending back towards long-term historical averages, which suggests there may still be quite a bit of potential upside for sales as we head into 2025, should the recent strength continue.
“Although sales activity had a slower start to the year, price trends began 2024 on the rise and closed out the year on a flatter trajectory. Most market segments saw year-over-year increases of a few per cent except for apartment units, which ended 2024 roughly flat.
“With the data showing renewed strength to finish the year however, it looks as though the 2025 market is positioned to be considerably more active than we’ve seen in recent years.”
Source: GVR
Residential sales in the region totalled 1,765 in December 2024, a 31.2 per cent increase from the 1,345 sales recorded in December 2023. This was 14.9 per cent below the 10-year seasonal average (2,074) for the month.
There were 1,676 detached, attached and apartment properties newly listed for sale on the MLS® system in Metro Vancouver in December 2024. This represents a 26.3 per cent increase compared to the 1,327 properties listed in December 2023. This was 1.1 per cent below the 10-year seasonal average (1,695).
Across all detached, attached and apartment property types, the sales-to-active listings ratio for December 2024 is 16.8 per cent. By property type, the ratio is 12.1 per cent for detached homes, 23.6 per cent for attached, and 18.7 per cent for apartments.
Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
Source: GVR
Sales of detached homes in December 2024 reached 494, a 31.4 per cent increase from the 376 detached sales recorded in December 2023. The benchmark price for a detached home is $1,997,000. This represents a two per cent increase from December 2023 and is nearly unchanged compared to November 2024. Sales of apartment homes reached 891 in December 2024, a 23.9 per cent increase compared to the 719 sales in December 2024. The benchmark price of an apartment home is $749,900. This represents a 0.1 per cent decrease from December 2023 and a 0.4 per cent decrease compared to November 2024. Attached home sales in December 2024 totalled 371, a 55.9 per cent increase compared to the 238 sales in December 2024. The benchmark price of a townhouse is $1,114,600. This represents a 3.4 per cent increase from December 2023 and a 0.3 per cent decrease compared to November 2024.
1 Areas covered by Greater Vancouver REALTORS® include: Bowen Island, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler. 2 On February 12, 2024, The Real Estate Board of Greater Vancouver changed its organizational name to Greater Vancouver REALTORS®.
