Welcome to the February Metro Vancouver Real Estate Market Update. New listings continue to pour in, though at a slower pace than last month. Sales have been keeping up, so the sales-to-active listings ratio for all three categories remains relatively unchanged.
The sales-to-active listings ratio is a key measure of supply and demand. Typically, a reading between 12% and 20% is considered balanced. The higher the ratio, the greater the demand and the stronger the upward pressure on prices. While the current sales-to-active listings ratio suggests a balanced market, the 10-year average numbers indicate a weaker price environment. Sales are 28.9% below the 10-year average, while new listings have increased to 11.6% above the 10-year average. As a result, total inventory is growing—it is now 36.4% above the 10-year average.
With the Trump tariff uncertainties, predicting the market’s direction has become more difficult. It is likely that interest rates will decline as the Bank of Canada aims to stimulate business activity. However, given the uncertainty, businesses may be reluctant to invest long-term even with lower interest rates. Some fortunate individuals with stable employment may take advantage of the lower rates to buy, but many will remain cautious as the job market weakens.
Before the tariffs became certain, rate predictions suggested that fixed rates had likely bottomed out, while variable rates might have had another 0.50% to drop. However, with the tariffs now almost certain, rates could fall even further. According to BMO, if the tariffs on Canada are set at 25% for a year, but 10% on energy products, and Canada retaliates with tariffs on $155 billion in U.S. imports, the Bank of Canada may lower its rate by another 1.0%. Given the erratic behavior of the orange one, predicting the final impact is nearly impossible. However, the longer the tariffs remain in effect, the greater the economic damage.
Ultimately, when job losses mount, maintaining a healthy real estate market becomes unsustainable.
I think the world can use some green beer about now. Enjoy St. Patrick’s Day!
