Metro Vancouver's condo market is slumping. Here are 4 key factors behind the slowdown

CBC News

· Posted: Jun 27, 2025 6:00 PM EDT | Last Updated: 36 minutes ago

After years of soaring prices and new builds, Metro Vancouver's condo marketplace is showing signs of strain with projects stalling, income declining, and developers hitting pause.

Industry experts accidental it's the effect of a "perfect storm" of 4 large forces converging: precocious involvement rates and softening rental income, reduced overseas superior and little migration — each of which person created a challenging situation for some buyers and builders.

"[We] are astatine a breaking point, the manufacture is doing terribly," said Anne McMullin, CEO of the Urban Development Institute.

"It's not conscionable that the manufacture is struggling; it's our inability to present homes that radical tin afford."

Rising involvement rates, declining rent

Increase successful borrowing costs has reduced affordability for buyers and made it much costly for developers to concern caller builds, says McMullin.

Just 5 years ago, owe rates were adjacent historical lows, making it comparatively affordable for buyers to get ample sums and put successful existent estate. But those rates person climbed significantly, pushing up monthly owe payments.

WATCH | Some existent property advisors question Surrey's determination to person condos to rental units:

The effect is higher "carrying costs" — the full disbursal of owning a condo, including owe payments, spot taxes and attraction fees.

The City of Vancouver's 2025 fund includes a 3.9 per cent spot taxation summation and an 18.2 per cent hike successful inferior fees, unneurotic adding hundreds of dollars to yearly expenses.

"It costs much to physique a portion oregon a location than the mean idiosyncratic successful the Lower Mainland tin afford," said McMullin.

"When it's costing much to physique … we spot task cancellations and we commencement to spot projects not going ahead."

At the aforesaid time, condo and rental terms maturation has stagnated, which means homeowners tin nary longer number connected dependable terms maturation to sorb the costs. 

According to the latest lodging marketplace update from the B.C. Real Estate Association, residential prices successful the state successful May 2025 were down 4.2 per cent astatine $959,058 compared to the aforesaid clip past year, portion residential income were down 13.5 per cent.

In Vancouver, mean asking rents for a two-bedroom fell from $3,440 successful 2024 to $3,170 successful 2025, according to the latest figures from Statistics Canada.

Though economists expect rates to statesman to diminution somewhat successful the 2nd fractional of the year, persistent ostentation risks and ongoing U.S. commercialized tensions could support borrowing costs elevated for now.

Decline successful overseas superior and migration levels

A 2nd origin cooling B.C.'s condo marketplace is the diminution successful overseas investment, mostly owed to the national prohibition connected non-residents purchasing residential spot successful Canada.

Initially enacted successful January 2023 nether the Prohibition connected the Purchase of Residential Property by Non-Canadians Act, the prohibition was precocious extended by 2 much years and is present acceptable to expire connected Jan. 1, 2027. It prohibits overseas commercialized enterprises and non-resident individuals from buying homes anyplace successful Canada.

The national authorities says overseas ownership has fuelled worries astir Canadians being priced retired of lodging markets successful cities and towns crossed the country.

But for developers, the measurement has made it harder to entree the superior needed to get projects disconnected the ground.

"While the volition is understandable, the existent broad-brush signifier of the prohibition besides limits entree to overseas superior that could assistance builders conscionable presale thresholds and concern caller construction," the Homebuilders Association Vancouver said successful a statement. 

The relation has called for a much flexible attack to the policy. The radical suggests Canada could look to Australia's model, which allows overseas buyers to put successful caller builds nether circumstantial conditions, specified arsenic requiring the units to beryllium rented retired oregon limiting resale timelines.

Another resistance connected request is simply a caller slowdown successful colonisation growth. 

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As of outpouring 2025, B.C.'s colonisation stood astatine astir 5.7 million. But the state recorded a nett colonisation decline, with 2,357 less residents compared to the erstwhile quarter.

The driblet comes amid changes successful national migration policy.

Under its 2025–2027 Immigration Levels Plan, the national authorities has introduced targets not lone for imperishable residents but besides for impermanent residents, which see planetary students and overseas workers. The program aims to trim impermanent nonmigratory volumes to nary much than 5 per cent of Canada's full colonisation by the extremity of 2026.

The Canadian Mortgage and Housing Corporation says the condo slowdown is apt to persist this twelvemonth arsenic proviso increases outpace demand.