B.C.'s real estate market set for a balanced 2025, but Trump's tariff threats loom
Indicators show 2024's home sales ended on a strong note, setting up a strong hand-off to 2025
The B.C. Real Estate Association (BCREA) says the province's housing market finished 2024 on a strong note, setting the stage for a balanced and steady 2025, but looming threats of tariffs from south of the border could disrupt this stability.
In its latest housing market update, the association says 4,484 residential unit sales were recorded in December, a 24.7 per cent increase from the same month in 2023.
The average price of a home was also up, landing at close to $1.1 million last month, a 5.6 per cent jump from December 2023.
BCREA's chief economist, Brendon Ogmundson, says active listings have risen by nearly 17 per cent, giving the province its highest start-of-year inventory levels since 2019.
"On the buyer's side, it means there's a bit more choice in the market," he told CBC News. "There are enough listings in the market right now to absorb that extra demand without, without prices rising too much."
The Canadian Real Estate Association (CREA), in an update this week, also forecasted an 8.6 per cent growth in home sales for 2025, with B.C. and Ontario — the two most expensive provinces for housing — expected to see bigger rebounds in sales and inventory.
Ogmundson described the current conditions as "a pretty good situation," with sales, listings and prices at relatively normal levels.
"It's the type of market we generally want to be in most of the time, where supply and demand are in balance," he added.
While buyers in B.C. are gaining more options, affordability remains a pressing issue, says University of British Columbia business Prof. Thomas Davidoff.
"We've had interest rates come down lately, which is great for affordability. However, they're falling from a very high level, and I don't think prices ever fully responded to the large increases we saw," he said.
Davidoff says that while prices may remain relatively steady over the next year or so, he advises against making major buying decisions by attempting to predict future market movements.
"The consideration should be, can you afford this home, is it a place you're happy to live in, and is the economic cost feasible or are you better off renting?"
'Storm clouds ahead'
Despite signs of recovery, Ogmundson says there are "lots of storm clouds ahead," pointing to potential economic challenges on the horizon.
As early as Monday, U.S. president-elect Donald Trump is expected to follow through with his promise of a 25 per cent tariff on Canadian goods — a move that the B.C. government says could result in the province losing about $69 billion by 2028.
"That really has the possibility to upend all of the optimism everyone's currently feeling," says Ogmundson. "If we were going to see [that], obviously that's going to slow down our economy considerably."
According to the province, the tariffs could also result in 124,000 job losses over the next three years, driving the unemployment rate to 7.1 per cent by 2026.
Davidoff says a weaker economy could dampen housing demand.
"When people lose their jobs or have reduction in income, they're less interested in buying homes," he said.
Although numbers indicate an optimistic outlook for B.C.'s housing market, experts agree much depends on how external factors — particularly U.S. trade policies — will unfold in the coming weeks.
With files from Renée Lukacs