February 2025 Real Estate Market Insights
Welcome to the February 2025 episode of the Presale Pulse, a real estate show brought to you by hosts Suzana Goncalves and Brittany Reimer. Watch the video to understand the latest macroeconomics, presale, and resale trends over the last 30 days affecting the local real estate market across Metro Vancouver and the Fraser Valley.
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Macroeconomics: Inflation, Interest, Economic Growth
In January, the macroeconomic environment in Metro Vancouver was marked by heightened uncertainty, driven by shifting interest rate expectations and potential trade disruptions. The Bank of Canada implemented another 25 basis point rate cut, lowering the overnight rate to 3%. While earlier forecasts anticipated a gradual pace of rate cuts in 2025, the looming threat of tariffs has altered this outlook. Analysts now predict potential rate cuts at every Bank of Canada meeting through October, possibly reducing the rate to 1.5% by year-end, depending on the severity of the tariffs. The temporary 30-day delay in tariff implementation provided short-term relief, but concerns remain about their long-term impact. Given that 75% of Canadian exports are US-bound, these tariffs could significantly weaken demand for Canadian goods, triggering business revenue declines, layoffs, and deeper recessionary pressures. Projections suggest that sustained tariffs could suppress Canada’s GDP growth for up to three years and push unemployment to 8%. Coupled with the economic drag from reduced immigration, the risk of stagflation—low growth paired with high inflation—becomes a serious concern. The Bank of Canada faces the challenge of balancing rate cuts to stimulate growth without exacerbating inflation, leaving the economic trajectory highly dependent on evolving trade dynamics.
Presale: January’s Presale Market Hits Pause
The Greater Vancouver and the Fraser Valley presale market was notably quiet in January, with no new project launches or units brought to market. This slowdown was expected, as the post-holiday period typically sees reduced activity, with potential buyers easing back into routines after the festive season. Additionally, the timing of Lunar New Year limited the window for projects to ramp up marketing efforts, prompting many developers to delay launches until later in the year. Although activity picked up slightly around Lunar New Year, driven by aggressive buyer incentives, it remains to be seen how effective these strategies have been. Developers are closely monitoring current sales performance as a litmus test for market demand before committing to new launches.
Looking ahead to February, the market is expected to see a resurgence with 13 projects set to launch, totalling nearly 1,300 units. The majority of these are wood-frame and townhome developments, primarily concentrated in the Fraser Valley, reflecting buyers’ price sensitivity and the relative ease of bringing smaller-scale projects to market. However, despite this upcoming activity, delays remain common, with several projects originally slated for earlier launches still lacking confirmed dates, highlighting ongoing challenges in the presale landscape.
Resale: Resale Market Cools with Rising Listings and Stable Prices
The resale market experienced a seasonal slowdown in January, with sales activity declining compared to December 2024. Greater Vancouver recorded 1,552 sales, down 12.1% from the previous month but up 8.8% year-over-year. In contrast, the Fraser Valley saw 818 sales, marking a steeper month-over-month decline of 17.7% and a 12.8% drop from the same time last year. Both regions reported sales well below their 10-year seasonal averages, reflecting cautious buyer sentiment. Inventory levels continued to rise, with active listings in Greater Vancouver up 5% from December and 33.1% year-over-year, while the Fraser Valley saw a 15.4% monthly increase and a significant 48.7% annual jump—pushing listings to a new 10-year seasonal high. This growing inventory, coupled with buyer hesitation due to potential tariffs and expectations of further interest rate cuts, has created favourable conditions for buyers. The sales-to-listings ratio indicates a balanced market in Greater Vancouver at 14%, while the Fraser Valley has shifted into a buyer’s market at 11%. Despite these dynamics, home prices remained stable, with Greater Vancouver posting a slight 0.1% increase in the HPI from December and a 0.5% rise year-over-year, while the Fraser Valley saw no monthly change and a modest 2.4% decline annually. The outlook for pricing remains uncertain, hinging on economic developments, interest rate trends, and the potential impact of delayed tariffs.
Presale Projects mentioned in this episode:
Links mentioned in this episode:
- February 2025 Presale Pulse Report
- MLA Advisory Services and Sample Reports
- Contact Advisory
- Subscribe to MLA Newswire
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