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Vancouver Housing Market Will Stay Depressed in 2025: Experts Sound the Alarm
Canada’s housing agency, CMHC, just admitted something they’ve never said so bluntly before: home prices in British Columbia are expected to fall in 2025. The hardest-hit market? Vancouver real estate, particularly homeowners and developers caught in the pre-sale condo crisis.
But there’s more to this story than just declining prices. Two new reports — one from the Canadian Mortgage and Housing Corporation (CMHC) and the other from RBC Economics — outline what’s ahead for Canada’s housing market in 2025 and 2026. Here’s what you need to know if you own, invest in, or are looking to buy Vancouver real estate.
National Forecast: Prices Set to Fall
Both CMHC and RBC project a 2% national home price decline in 2025, with steeper drops expected in Ontario and British Columbia.
In Vancouver specifically, prices have already slipped around 3% year-over-year, with some property segments falling even further. Given that Vancouver is already underperforming the national average, it’s reasonable to expect an additional 2–3% price reduction by the end of 2025.
Why Vancouver Is More Vulnerable
Unlike other Canadian cities, Vancouver (and Toronto) face unique pressure from the pre-sale condo market. Many developers are struggling to complete projects as financing tightens, leaving both buyers and builders exposed.
This adds downward pressure on property values, especially in new construction and speculative segments of the market.
Can We Trust Housing Forecasts?
It’s important to remember that forecasts aren’t guarantees. For example, at the start of the pandemic, CMHC predicted an 18% housing market decline. Instead, we saw record price increases as demand surged and interest rates dropped.
So while experts are sounding the alarm for 2025, it’s best to treat these predictions as guidance, not certainty.
Housing Affordability: Still Out of Reach
Even with a potential 10% price correction, affordability in Vancouver remains a major challenge. High mortgage rates continue to limit buying power:
- Variable rates might see a small cut (0.25%) by late 2025.
- Fixed rates, tied to the bond market, are expected to hold steady or even rise.
This means that while prices may drop, many buyers still won’t qualify for mortgages large enough to purchase in Vancouver’s market.
Rental Market Shifts
Interestingly, rental prices in Vancouver are falling. As of mid-2025:
- 1-bedroom rents dropped 9.5% year-over-year.
- 2-bedroom rents declined 7.1% year-over-year.
Three main factors explain this:
- High immigration numbers leveling off.
- More developers pivoting to rental projects.
- A surge of newly completed rental buildings hitting the market.
CMHC expects rental rates to stabilize, but once supply is absorbed, rents will eventually climb again.
Outlook for the Canadian Economy
Beyond housing, experts agree Canada’s overall economy will face a mild recession in 2025, but recover in 2026. This timeline aligns with when both CMHC and RBC expect to see a housing market recovery — not necessarily rising prices, but renewed buyer confidence as more Canadians re-enter the market.
Key Takeaways
- Vancouver housing prices are forecasted to fall 2–3% in 2025, steeper than the Canadian average.
- Affordability remains strained — price drops won’t be enough to offset high interest rates.
- Rental prices are temporarily down, but are expected to rebound once supply and demand rebalance.
- Recovery is more likely in 2026, with improved buyer confidence rather than a full price rebound.
Final Thoughts
For buyers, 2025 may bring rare opportunities in the Vancouver market, especially in segments under pressure like pre-sale condos. For sellers and investors, it’s a year to be cautious, realistic about pricing, and prepared for slower demand.
If you’re considering buying or selling in Vancouver in 2025, working with a real estate professional who understands these dynamics is more important than ever.
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