B.C. Housing Market Rebounds Amid Lower Rates, but Uncertainty Looms
The real estate market in British Columbia is experiencing a resurgence, driven by last year’s interest rate cuts from the Bank of Canada. According to the B.C. Real Estate Association (BCREA), the province’s housing sector is now in a balanced state, marking its healthiest condition in nearly a decade.
After two years of sluggish sales, the market is regaining momentum, allowing inventory levels to rise from record lows to a more sustainable position. Chief Economist Brendon Ogmundson explained that the slower activity in previous years created an opportunity for supply levels to recover, leading to a more stable market environment.
The BCREA’s 2025 First Quarter Housing Forecast projects a 14.3% increase in residential sales through the Multiple Listing Service (MLS), with transactions expected to reach 85,140 this year. The forecast anticipates continued growth into 2026, with sales climbing to nearly 87,970 units. While these numbers reflect a strong rebound, they remain below historical highs. In 2024, approximately 74,000 homes were sold in B.C., a slight improvement over the previous year but still trailing long-term averages.
Falling Mortgage Rates Encourage Sellers
One of the key factors fueling this resurgence is the decline in mortgage rates. Following a period of aggressive rate hikes in 2023, the Bank of Canada began cutting its overnight rate, easing financial pressure on buyers and sellers alike. The BCREA predicts that additional rate cuts are likely, with the central bank expected to stop reductions around 2.5%. Meanwhile, five-year fixed mortgage rates are projected to stabilize at approximately 4.5% in 2025.
As borrowing costs have eased, hesitant sellers who previously held off listing their properties are now returning to the market. This shift has led to a notable increase in new listings, helping to balance supply and demand. However, BCREA notes that much of the inventory growth in 2024 was not due to an influx of listings but rather a prolonged period of weaker sales.
Home Prices Expected to Rise
While some B.C. markets saw home prices decline when interest rates peaked, others remained resilient. Vancouver, for example, reached a record-high average home price in June 2024 despite economic uncertainty. Moving forward, the BCREA expects prices across the province to rise gradually, aligning with inflation trends. Buyers can anticipate a 4.5% increase in the average home price in B.C., bringing it to approximately $1,025,900 this year. In Vancouver, prices are forecasted to climb by about 2%.
The increase in home values, however, is not expected to be as dramatic as in past real estate booms. The accumulation of active listings in 2024, combined with a more balanced market, is likely to prevent a rapid surge in prices. Experts believe that while sales are set to rise, the market will be able to absorb the demand without creating excessive price inflation.
Potential Challenges: U.S. Tariffs and Economic Uncertainty
Despite the positive outlook, concerns remain regarding external economic factors that could impact B.C.’s housing market. One of the biggest uncertainties is the potential for new tariffs on B.C. exports to the United States. With trade policies constantly shifting, especially with political changes in the U.S., increased tariffs could negatively affect the province’s economy, potentially slowing down growth in the housing sector.
Ogmundson emphasized that while confidence in the market is growing, external economic pressures could introduce instability. “Markets across B.C. closed 2024 with significant momentum,” he said. “While we are entering 2025 with optimism and expectations for increased activity, the potential for punishing tariffs on B.C. exports to the United States presents significant uncertainty for the outlook.”
Buyers Face Increasing Competition
As the market heats up, competition among buyers is also rising. Tri-Cities realtor Jordan Macnab has already noticed a surge in activity, reporting multiple-offer situations becoming more common in recent weeks.
“For the first time in a while, we’ve seen multiple offers happening again,” Macnab said. “Just in the last week, three of my recent showings ended with competing bids. The market is definitely picking up.”
He expects this trend to accelerate as more sellers list their homes in the spring, traditionally a busy season for real estate. “A lot of people have been waiting on the sidelines due to interest rate uncertainty, concerns about the economy, and even political factors like Trump,” he explained. “But now, those who need to move or want to move are getting back into the market, attending open houses, and making offers again.”
With demand expected to rise, real estate professionals are advising buyers to act early. Securing mortgage pre-approvals now could help them stay ahead of the competition when more listings hit the market.
Spring Market Poised for Strong Growth
As 2025 progresses, B.C.’s real estate market appears to be on track for a significant rebound. With falling interest rates, increasing buyer confidence, and more sellers returning to the market, housing activity is expected to remain strong. However, potential economic risks, including U.S. trade policies, remain a wildcard.
For prospective buyers, the message is clear: the window of opportunity may be narrowing. Those looking to purchase a home should prepare now, as competition is expected to intensify in the coming months.
