The impact of tariffs on the housing market is already being felt. Even before they were implemented, just the threat of tariffs was enough to put buyers on the sidelines. Now that they are in place, the effects are hitting fast. Toronto, often viewed as a key indicator of the condo market, saw sales drop 28% month-over-month in February—a month that typically sees an increase from January.
Vancouver’s numbers reveal similar trends, with sales momentum reversing sharply after months of steady growth. While headline GDP growth showed a stronger-than-expected 2.6% annualized gain in Q4, the real story lies in GDP per capita, which has declined for two straight years, confirming that Canada has been in a per capita recession for over 24 months. Job vacancies have also plunged to their lowest levels since 2017, leaving workers with the worst job prospects in seven years. Despite what the official numbers suggest, the economic reality is pointing towards a prolonged slowdown that could further weaken real estate demand.
One of the few bright spots for homeowners is the declining 5-year bond yield, which has hit a three-year low of 2.6%. This drop has made mortgage rates more attractive for the more than 50% of borrowers set to renew in the next two years. However, with tariffs likely to slow GDP growth even further, it’s increasingly likely that the Bank of Canada will be forced to cut interest rates, possibly as soon as this spring, especially with an election on the horizon.
Toronto’s ongoing condo downturn is another warning sign. The market hit a turning point in mid-2022, and now, nearly three years into the correction, there is no clear recovery in sight. While 2023 saw nearly 30,000 condo completions in the Greater Toronto and Hamilton Area, analysts expect new completions to plummet in the coming years, with projections falling to just 411 units by 2030—a nearly non-existent supply level for a major urban region. Given Vancouver’s similar challenges with pre-sale condos, today’s record inventory could eventually lead to a severe housing shortage in the years ahead.
The latest February 2025 real estate stats for Vancouver confirm shifting market dynamics. Total sales came in at 1,815, down 12% year-over-year and 29% below the 10-year average. This is particularly notable because since October, sales had been higher than 2023 levels each month—until February, when the trend reversed. The level of uncertainty created by tariff threats and economic instability has pushed buyers to the sidelines, and now that tariffs are in place, it appears the spring market may not materialize in the usual way.
New listings rose 11% year-over-year to 5,066, marking a 12% increase above the 10-year average. However, February listings were actually lower than January, an unusual occurrence only seen six times in the past decade. The standout statistic here is condo inventory—February saw the highest number of condo listings ever recorded for the month, following a record-breaking January.
This surge suggests a shift in buyer preference away from high-density living, as well as a growing supply of purpose-built rental housing, which is altering demand patterns. Inventory levels remain a key story, with active listings rising 32% year-over-year to 12,350, sitting 36% above the 10-year average. This places inventory at its highest February level in over a decade, though still below the 2012 peak of 14,875. The sales-to-active listings ratio stands at 15%, marking the 10th consecutive month in a balanced market, with detached homes at 10%, townhomes at 20%, and condos at 17%.
In terms of pricing, Vancouver's Home Price Index (HPI) fell by $4,000 last month to $1,169,000, reflecting a 1.1% year-over-year decline and a 3.5% drop since June 2024. The median price edged up slightly by $2,000 to $920,000, while the average price increased by $16,000 to $1,228,000. However, with high inventory and weaker demand, downward pressure on prices could continue in the coming months.
With economic uncertainty, rising inventory, and shifting buyer preferences, Vancouver’s real estate market is facing headwinds. The usual spring market boost may not appear this year, and condo owners, in particular, should pay close attention to the surging supply levels. The big question now is whether the government will step in with meaningful policy changes or leave the market to correct itself.
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