High inventory and economic uncertainty are dampening sales
Metro Vancouver home prices may dip slightly this year as buyers retreat in the face of political and economic uncertainty, according to real estate experts monitoring the region’s cooling market.
Despite lower interest rates and the typically busy spring season, April home sales failed to deliver their usual surge. Market analysts say growing fears of a potential recession and concerns over political instability are sidelining both end-users and investors, leaving more homes on the market and applying downward pressure on prices.
“Sales did increase, but the typical seasonal pattern has been quashed by external factors,” said Ryan Berlin, head economist at realty firm Rennie.
Over the past decade, April sales in Metro Vancouver averaged 79% higher than those in January. This year, however, the increase was just 34%.
Berlin pointed to growing tension around US trade policies as one factor feeding buyer uncertainty. Another is the uncertainty leading up to the Canadian federal election, which created a wait-and-see atmosphere among potential buyers.
The result is rising inventory across Metro Vancouver. According to Rennie data, there are now about 16,000 pre-sale and new homes and 24,000 resale homes on the market — the highest inventory level since 2018.
“We are at an all-time high for available homes,” Berlin said.
Investors pull back
Realtor Steve Saretsky echoed the concerns, noting that condos that used to sell in one to two weeks are now sitting for two to three months.
“Unsold inventory on developer balance sheets is at all-time highs,” he told CBC News.
Investor activity, once a major driver in Vancouver’s pre-sale market, has also dried up. Saretsky explained that with current rent trends and home price stagnation, investors are backing away.
“The investor base really disappeared, which is to say the math simply does not work anymore,” he said.
Read more: Record number of new condos remain unsold in Vancouver
Projects that rely heavily on pre-sales may never get off the ground, and investors already in the market are now looking for exits as rents decline and returns diminish.
Could prices drop?
While official home price benchmarks have yet to reflect major drops, experts suggest sellers may need to start cutting prices to stay competitive.
Saretsky noted, “When you have record inventory for sale or you've got six or seven months of inventory on the market, sometimes the only way to stand out [as a seller] is to have the lowest price, right?”
The Greater Vancouver Realtors Association (GVRA) now describes spring 2025 as a buyer’s market, pointing to lower borrowing costs and abundant listings as ideal conditions for buyers ready to act.
Tom Davidoff, associate professor at UBC’s Sauder School of Business, said buyers could benefit from the shift.
“If I were a buyer and I didn't need a place desperately… I think I would be doing low-ball offers,” he said. “I think bidding five, 10, 15% below asking. Why not? Take some swings.”
Still, Berlin stressed that while conditions might be shifting in the buyer’s favour, most home prices are holding steady for now.
“This is pretty typical because home prices tend to be what we call ‘downward sticky,’” he explained.
However, some developers, especially those sitting on unsold units, may be forced to make cuts.
“If you're sitting on a number of homes that you haven't sold yet, you're unable to extract that capital from the project and invest it in the construction of new homes,” Berlin said.
“Until we have some certainty around what Canada's economic strategy is and [what] our relationship trade wise is with the US, I think you're going to see the buyer stay right where they are.”
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