Affordability in Vancouver has improved by roughly 37% from its 2023 peak. Monthly mortgage payments on an average home have fallen by about $1,500, dropping from roughly $5,600 to $4,100. That’s a material shift, bringing affordability back to early-2022 levels. Historically, when affordability sat here, transaction volumes were meaningfully higher. While payments remain well above pre-pandemic norms, the direction of travel matters—and for buyers watching the market closely, this is the most constructive affordability backdrop in years.

But beneath that surface improvement, cracks are forming. Developers—arguably the most forward-looking participants in housing—are pulling back sharply. Land sales, an early indicator of future housing supply, have collapsed well below historical norms. When developers stop buying land, it’s rarely about today’s headlines; it’s a judgment call on whether prices, financing, and demand will justify risk years down the road. The implication is uncomfortable: fewer projects today guarantees tighter supply later, particularly as population growth and confidence eventually normalize.

Employment data adds another layer of complexity. Canada’s labor market is cooling, but not in the way past downturns looked. Job losses are emerging in traditional sectors, yet unemployment hasn’t spiked because the workforce itself is shrinking—driven by retirements and slower population growth. That structural shift matters. Slower labor growth caps wage growth, which in turn limits housing demand over the long run. At the same time, uneven job creation across provinces may quietly redirect housing and rental demand to where employment is strongest.

On the rental front, the story is finally turning for tenants. Asking rents have fallen for more than a year and recently hit multi-year lows, with Vancouver among the steepest declines. Yet even here, the rate of decline is slowing—hinting that rental markets may be approaching stabilization.

Governments, facing slowing activity, are stepping in with incentives. Programs like Nova Scotia’s ultra-low down payment initiative underscore a key theme of the episode: these policies are less a sign of strength than a response to economic fragility. They don’t solve affordability at its root; they increase leverage in an already indebted system.

Add rising home insurance costs—driven by aging housing stock and extreme weather—and the cost pressures on ownership and rental housing continue to build, even as headline prices soften.

The takeaway is clear: today’s market is defined by contradictions. Affordability is improving, but demand remains hesitant. Supply is being quietly choked off. Costs are shifting rather than disappearing. And interest rates, once the dominant force, may now be the least volatile variable.

This episode isn’t about calling a top or a bottom. It’s about understanding where the next pressure points are forming—and why the decisions being made today may shape Canada’s housing landscape for the next decade.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com

www.thevancouverlife.com

January delivered a sobering wake-up call for Greater Vancouver real estate. Sales volumes collapsed 29% year over year—on top of 2025 already being the weakest sales year in a quarter century. That makes this not just a slow start to the year, but one of the most severe demand contractions the market has faced in decades. Against that backdrop, this episode dives into the newly released February data to answer the question on everyone’s mind: how close are we to the bottom—and could 2026 actually be worse than 2025?

The discussion begins with a critical stabilizing metric: mortgage arrears. Despite mounting pressure elsewhere, Canada’s arrears rate remains flat at 0.25%, with just over 12,000 mortgages delinquent out of nearly five million. By global standards, this is extraordinarily low—especially compared to the U.S., where arrears sit more than six times higher. Historically, Canada has never experienced sustained spikes in this metric, suggesting that while prices are falling, systemic mortgage distress has not yet materialized.

From there, attention shifts to a growing concern for long-term growth: British Columbia’s rising perception as “uninvestable.” Recent legal developments surrounding the Prince Rupert Port Authority underscore a broader risk narrative—projects approved at every level can still face years of legal uncertainty. As foreign capital grows more cautious, the downstream consequences become clear: fewer housing starts, tighter supply down the road, and higher costs borne by everyday Canadians.

The episode then tackles a powerful and timely issue—seller psychology. In one of the most competitive markets in over a decade, many sellers are attempting to cut commissions in an effort to preserve net proceeds. The irony is stark. With inventory at multi-year highs, days on market stretching to seven-year peaks, and price cuts routinely reaching $100,000–$150,000, execution matters more than ever. In a 9% sales-to-active ratio environment—the lowest in 13 years—pricing mistakes aren’t corrected, they’re punished. The takeaway is clear: this is the kind of market where experience, exposure, and strategy matter most.

Zooming out, Toronto provides a cautionary parallel. GTA prices are now down 27% from their 2022 peak, sales are at post-financial-crisis lows, and inventory has surged to record January levels. Vancouver’s February data shows similar stress. Sales fell to just 1,104 transactions—down 38% month over month and 29% year over year—ranking among the weakest months in two decades. Inventory now sits 38% above long-term averages, while prices continue their steady descent. The benchmark HPI has dropped for ten consecutive months, pulling values back to late-2021 levels.

The episode closes with a crucial reminder: housing downturns don’t stay contained within housing. Falling prices ripple outward—reducing government revenues, slowing construction, tightening credit, and ultimately weighing on employment and consumer spending. Some price correction is healthy. Prolonged, disorderly declines are not. The risk ahead isn’t that the market is adjusting—but that we underestimate how deeply housing is embedded in Canada’s entire economic system.

This episode offers a clear, data-driven look at where we stand, why the bottom isn’t in yet, and why the next phase of this cycle will demand far more discipline.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com

www.thevancouverlife.com

The Canadian real estate market is currently trapped in a fascinating, if not harrowing, contradiction. On one hand, we are witnessing a 35-year high in completed but unsold inventory, with 19,000 units sitting vacant as of last month—a staggering 52% above the long-term average. On the other, the British Columbia Real Estate Association (BCREA) is sounding the alarm on a 27% price surge by 2032. To the casual observer, this looks like a market in collapse; to the seasoned analyst, it looks like a massive supply-side vacuum in the making. The reality is that developers have effectively "penciled down," with virtually zero new projects slated for completion in 2029 or 2030. We are currently gorging on a surplus of "tiny condos" that the modern Canadian family cannot—or will not—occupy, while the pipeline for functional, family-sized housing has run dry.

This paralysis is being compounded by a Bank of Canada (BoC) that has opted for a "wait and see" approach, holding rates at 2.25% for the second consecutive meeting. The Governor’s pivot toward "uncertainty" suggests that growth concerns are finally outweighing inflation fears. However, this lack of forward guidance is a double-edged sword. When a central bank claims the climate is "too uncertain," it is a tacit admission that they no longer trust their own data models. This caution is reflected in the mortgage market: while 43% of new borrowers are still gambling on variable rates, the smart money is beginning to eye five-year fixed products. With projections suggesting the overnight rate could climb another 100 basis points to 3.25% by 2031, the era of "cheap money" is not coming back, making "locking in" a prudent defensive maneuver for the household balance sheet.

The human cost of this economic friction is becoming impossible to ignore. In 2025, Canada saw a record 120,016 people emigrate—the fourth consecutive year of growth in departures. Most alarming is that 54% of those leaving are aged 25 to 49. This is not just a "brain drain"; it is an "equity drain." When your core tax base and household-forming demographic flee for more affordable jurisdictions, it signals a systemic failure in the Canadian dream. This exodus is mirrored by a collapse in homeownership rates across every age group under 75. For the first time in modern history, young Canadians are being forced into long-term tenancy, not by choice, but by a market that has prioritized 500-square-foot investment vehicles over livable family homes.

Looking ahead to the remainder of 2026, the labor market may be the catalyst for the next shift. With 21% of businesses planning staff cuts—the highest level since 2016—and EI recipients up 16% year-over-year, the pressure on the BoC to cut rates may become irresistible. Yet, retail sales paradoxically hit all-time highs last month, driven by spending on "self-care" items like clothing and jewelry rather than building materials. This suggests a consumer base that has given up on the "big" dreams of renovation and ownership, choosing instead to spend their dwindling disposable income on immediate gratification. We are in a volatile transition period where sentiment is negative, but the underlying data suggests that once today’s inventory is absorbed, we will wake up to a market with no new supply to meet the next cycle of demand.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com

www.thevancouverlife.com