B.C.'s real estate market in 2025 will be more balanced, analyst says

The B.C. Real Estate Association says it's expecting a fairly even balance between the number of people selling and seeking homes in the province in 2025, although its chief economist says a couple of factors could still disrupt an otherwise "boring" upcoming year. 

In its latest housing market update, the association says 2025 will see things settling down following a handful of more turbulent years, namely the post-pandemic sellers market fuelled by low interest rates and the interest rate shock of 2022-23.

Its chief economist, Brendon Ogmundson, said B.C. is now seeing a "balanced market" — where the number of homes for sale matches the number of people actively looking to buy — shown in the chart below as between .10 and .20.

And with borrowing costs coming down, Ogmundson said it should make monthly payments more manageable for those taking on a mortgage.

"Our most likely scenario is a pretty boring year of average sales, average kind of long-run price growth.". 

But as with any forecast, it comes with a caveat fit for most prognostications: nothing is guaranteed.

Ogmundson said the last time he predicted a boring year was in 2019 heading into 2020, when the COVID-19 pandemic made it anything but that. 

The main uncertainty for 2025, according to both Ogmundson and University of British Columbia business Prof. Thomas Davidoff, is whether incoming U.S. president Donald Trump will, in fact, put a 25-per-cent tariff on Canadian goods.

Then there is the slow uptick of another indicator: unemployment.

"The lower interest rate environment normally would lead to a strong 2025," Davidoff said. "As it stands, I would say the crystal ball is anything if crystal clear, because of the headwinds of reduced immigration and potential tariff threats and what looks like maybe the beginning of a recession."

For those looking to get into the market, the timing may be good, according to one potential buyer. Surrey resident Tyson Porter-Forbes said he is looking for a bigger place, now that he and his wife Jillian have had their second child.

"With interest rates coming down, it's really making it a better time for us to come into the market," he said. "We're hoping to time it perfectly, actually."

Still, affordability is a problem in Metro Vancouver, even for a couple like the Porter-Forbes who both have good jobs and steady incomes.

They are looking to upgrade from a townhouse to a larger space to accommodate their growing family.

"I grew up in Vancouver and I've always hoped to stay local," Jillian said. "So that's hard for me to not be able to accept that we might have to move further and further away from kind of where I'd hoped to stay."

With a big move ahead, the Porter-Forbes both said they are happy to hear the stress of a very busy market with rapidly increasing prices won't be a factor in their next home sale and purchase.

On the new housing supply side, Davidoff said both owners and renters may see some light at the end of the tunnel as more new builds move to completion.

"With added rental supply and weakened immigration, I think we've already seen rents maybe come down a little bit nominally, which is very unusual for the last few years in Vancouver. And I don't see much expectation of rising rents in the next year," he said.