Has Vancouver’s real estate market reached a tipping point?

Between higher interest rates and the after-effects of the COVID-19 pandemic, Vancouver’s real estate market has been relatively flat over the last few years. But both homeowners and investors may soon have reason to celebrate, because the latest numbers seem to indicate that markets across the Lower Mainland may have finally reached a tipping point – and that 2025 could see a return to higher levels of activity than we’ve since early 2020.

What’s behind the surge in activity?

According to a recent report by the Greater Vancouver REALTORS® association, 60,388 residential properties were listed on the MLS® system in Metro Vancouver last year. This is 18.7 per cent higher than it was in 2023.

In December 2024 alone, the number of home sales registered on MLS® were up by more than 30 per cent compared to the same month in the previous year. The average price for those sales was around $1,171,500 – up nearly half a per cent from 2023.

So what’s fuelling this year-end surge in activity?

There are several factors that almost always come into play when talking about Vancouver real estate, from our housing inventory levels to our perennially strong population, employment and economic growth numbers. But the biggest reason behind the growth in both listings and sales doubtless has to be the recent series of drops in Canada’s key lending interest rates.

Canada’s falling interest rates

In real estate, interest rates determine everything from how much house a new homebuyer can afford, to how much your monthly mortgage payments will be. For most of the past few years, interest rates in Canada have been on the rise.

As recently as June 2024, for example, the Bank of Canada’s benchmark interest rate was set at a high of five per cent. But over the last six months, the Bank of Canada has cut its interest rate a total of five times, to its current 3.25 per cent.

As a result, mortgages are much less expensive now than they were just half a year ago. This drop in buying and carrying costs is almost certainly encouraging more buyers who may’ve been sitting on the sidelines to start coming back to the real estate market.

Promising predictions for the year ahead

While we haven’t seen a huge uptick yet this year, all of these changes bode well for the likelihood of future growth in home sales and prices throughout the Lower Mainland in 2025.

In their Residential Market Forecast for the first quarter of 2025, for instance, the Greater Vancouver REALTORS® predicted that lower interest rates are likely to spur both buyer demand and potentially housing prices as well.

All of which means, whether you’re a renter, a new homebuyer or an investor, this could be the best time we’ve seen in years to talk to your REALTOR® (or contact us for a free consultation) to find out if now might be the right time for you to make your next move.