For years, the red-hot B.C. real estate market was justified on the basis that there was simply more demand than supply. People wanted to live here, and they were prepared to pay through the nose to do so. Prices, we were told over and over again, were the result of market fundamentals.
Then prices stagnated.
Then they started dropping.
Builders and sellers are now demanding government action to get us back to “normal.” But governments don’t have that much control.
Not one of the key factors that could give the market a boost is present right now.
• A flood of new homebuyers?
Canada’s rate of births per family has been on the decline for generations, and just hit its lowest point ever last year. B.C. has the lowest number of new births in Canada. A baby boom won’t save housing markets.
Immigration won’t, either. A couple of years ago, federal immigration targets were set at more than 470,000 new permanent residents a year. Those numbers have been slashed, and Ottawa plans to stabilize at 380,000 annually from 2026 to 2028.
Temporary foreign workers and students? Those numbers have been cut even deeper, resulting in B.C. actually losing population last year for the first time ever.
• Rock-bottom interest rates?
Rates are already historically low, and four rate cuts in 2025 failed to bring the buyers back. Analysts now expect rates to hold steady and then rise slightly late this year or early in 2027.
• A booming economy?
It would be really nice if unemployment rates drop, wages rise sharply, and our trade and tariff issues with the United States vanish sometime in 2026. But it’s not very likely. As long as Trump is in the White House, uncertainty will persist.
• Cheaper housing?
Define “cheaper.”
Housing prices right now are already much, much cheaper than they were in the COVID-19 era peak, when the average price of a detached house in the Fraser Valley hit $1.9 million. It’s now $1.4 million – which is still way above the $1 million a house cost in 2019, which even then was considered unaffordable.
If someone comes up with a cheap modular house that slashes the price of a new build by 20 per cent, that might change a few things. But Canadian developers have yet to champion technological change.
So my forecast?
More sluggish sales and prices on the down slope. Eventually, maybe this year, maybe in 10 years, economics and demographics and housing supply will cause prices to go up again. But not necessarily to the deranged levels we once considered normal.
We’ve gone through multiple rounds of manic price increases over the past 20 years. Each one saw another income bracket priced out of the market, resigned to living at home until age 30, sharing with roommates, or moving to Calgary.
Getting back to a normal market isn’t possible, because we’ve never experienced one – most people alive currently only remember a market that has always seen prices rise faster than real wages.
It was unsustainable. This stagnation is as “normal” as the frenzy that came before it.