We are excited to present the MLA Intel 2025 report, our annual deep dive into BC's presale real estate market. This latest edition provides a detailed analysis of last year’s market trends and offers valuable insights as we look ahead to 2025.
FUNDAMENTALS: SUBDUED ACTIVITY, RISING CHALLENGES, AND A CAUTIOUS ROAD AHEAD
The 2024 market has been marked by subdued activity across both residential and commercial real estate sectors, with sales volumes and pricing expectations remaining flat compared to 2023. Active resale inventory increased significantly, reflecting cautious consumer sentiment, and the presale market was particularly impacted as buyer urgency remained low. Rising development costs, policy gridlock, delays in municipal approvals, and mounting uncertainty contributed to project delays or deferrals, with only 118 new presale projects launched, 25% below the 10-year average. The broader economic environment, marked by controlled inflation, a slowing labour market, and rising construction costs, has also put pressure on the housing sector. Immigration growth has slowed, while housing remains a key driver of inflation. As we look to 2025, the market is expected to remain challenging, with developers needing creative marketing strategies and strong sales practices to navigate a slower presale environment.
PRESALE AND RESALE MARKET SUMMARY: END-USERS DRIVE ACTIVITY AS PRESALE MARKET FACES CHALLENGES
In 2024, both the presale and resale markets experienced muted activity, with hesitant buyers driven by high premiums for presale units compared to resale, concerns over negative cash flows, and a complex policy landscape. Presale project launches followed typical seasonal trends, with a peak in spring and a smaller one in fall, and were mainly driven by end-users looking for affordable options. Developers focused on wood-frame units and offered incentives to attract buyers, resulting in 11,550 units being released, with a 42% absorption rate. Despite mid-year interest rate cuts, the market remained sluggish, with total listings rising 19.4% year-over-year and sales finishing 22% below the 10-year average. By year-end, some signs of recovery emerged, but overall sales activity remained well below historical norms.
FORECAST: A CAUTIOUS PRESALE LANDSCAPE WITH FOCUS ON AFFORDABILITY AND STABILITY
The 2025 presale market is expected to face continued challenges, with investor buyers absent, leaving end users—particularly first-time homebuyers—as the dominant buyers. As these buyers focus on affordable, smaller-scale, low-rise developments in desirable neighbourhoods, the demand for larger-scale concrete projects may remain limited due to financing difficulties. While the government continues to incentivize purpose-built rentals, a reduction in both permanent and temporary residents is expected to soften rental demand and prices. The presale market may also experience some uncertainty as developers face risks with unsold units and growing project delays. Buyers will be drawn to projects with strong sales messaging and developers with proven track records. Despite anticipated price increases in the resale market (3-6%), presale demand may not see significant growth until late in 2025. The overall market is likely to remain cautious, with fewer presale units released and potential policy shifts adding to the uncertainty.
In addition to expanding on the above in-depth, the MLA Intel 2025 report contains:
- Buyer Profile Breakdown: Greater Vancouver and Fraser Valley
- Key Market Spotlights: Greater Victoria and the Okanagan
- Rental Market Summary
- 2024 Policy Timeline
- MLA Canada's 2025 Residential Developer Survey
- Product Design Trends and Insights
- 2024 Best In-class Floorplans
This report, featuring insights and analysis from MLA Advisory and MLA Canada's leadership team, is designed for anyone looking to gain a head start in the 2025 real estate market.
