Have We Fallen Out of Love with Real Estate?
There has been a noticeable shift in the psychology of buyers and sellers across Metro Vancouver. Real estate, arguably our most important tangible asset, whether it is an investment, a place to live, or a home for a business, I am seeing it is no longer viewed with the same optimism it was just a few years ago.
Many individuals have experienced quickly declining values, higher carrying costs, and an uncertain outlook. As a result, conversations at the ground level we are having have changed dramatically. Even individuals who built a significant portion of their wealth through real estate are, at this stage of their lives, allocating more of their capital into other financial vehicles.
At the same time, another trend is quietly emerging.
Sophisticated, well-capitalized investors who have remained inactive for years are beginning to make meaningful acquisitions in premium locations. They are purchasing assets at prices that reflect a very different market than we saw only a few years ago. These groups are not investing based on emotion or headlines. They are investing based on long-term fundamentals.
When confidence eventually returns, and history suggests it always does, I believe we will see capital flow back into the market in a more healthy and thoughtful way. Right now we may be in the best environment for buyers my career will see.
– JOE HAWBOLDT, Associate, London Pacific
INTEREST RATES
Interest rates remained unchanged throughout Q2 2026 and the Bank of Canada again, for the 6th consecutive time, maintained its overnight rate at 2.25% on July 15, 2026. Canada’s economy is showing signs of improvement. Growth is picking up and core inflation remains close to 2%.
The next announcement will be September 2, 2026.
Source: Bank of Canada
INFLATION
Canada’s headline inflation rate increased to 3.2% year-over-year in May 2026, up from 2.8% in April, largely driven by higher global energy prices.
Despite the increase in headline inflation, the Bank of Canada’s preferred core inflation measures remained relatively stable at an average of 2.1%, indicating that underlying inflationary pressures continued to ease.
Source: Stats Can
GDP
Canada’s economy strengthened in April, with real GDP increasing 0.5%, marking the strongest monthly growth since July 2025 and exceeding initial expectations. The expansion was led by gains in the goods-producing sector, particularly mining, quarrying, oil and gas extraction, and manufacturing, while service-producing industries also recorded modest growth.
Source: RBC
LABOUR MARKET
Canada’s labour market showed renewed strength in May, with employment increasing by 88,000 jobs, recovering a significant portion of the losses recorded earlier in the year. The unemployment rate declined to 6.6%, outperforming expectations, although it remains above the level generally considered consistent with a balanced labour market.
Source: TD Forecast
METRO VANCOUVER RESIDENTIAL REAL ESTATE
Demand for all home types in Metro Vancouver increased in June with home sales being up 10% year-over-year.
“June’s data could be an early sign of a shift in the market. In recent years, sales trends have usually been mixed across home types, which is typical of a sideways trending market. But with all housing types posting gains in June, the data indicate demand may be returning to the market more broadly.” – Andrew Lis, GVR chief economist.
Source: GVRealtors
BC HOUSING MARKET
The British Columbia Real Estate Association (BCREA) released its 2026 Second Quarter Housing Forecast on April 27, 2026.
Multiple Listing Service® (MLS®) residential sales in BC are forecast to fall 2.1 per cent to 68,700 units this year. In 2027, MLS® residential sales are forecast to move higher, rising 7.7 per cent to 74,000 units.
Source: BCREA
COMMERCIAL SALES
The retail sector fundamentals exhibited early signs of stabilization, however, the legacy of recent economic headwinds remained visible with nearly $443 million in dollar volume transacted, representing a 10% decrease.
The multifamily investment sector experienced the most significant slowdown, recording $185 million in dollar volume transacted, representing a 48% year-over-year decrease.
The industrial sector has historically maintained positive net absorption due to the scarcity of industrial land in the region. While conditions in early 2025 softened briefly, the first quarter of 2026 recorded a strong return to positive territory with nearly 722,000 square feet of net absorption.
The land sector recorded a decline in activity, heavily influenced by developers adjusting pipelines to manage elevated construction costs and prolonged municipal approval structures. This resulted in nearly $184 million in dollar volume transacted, representing a 28% year-over-year decrease.
Office investment The only core sector to report year-over-year growth, with a 45% increase in investment volume, recording $338 million in dollar volume transacted. This increase underscores a persistent confidence in Vancouver’s stabilizing office market.
Source: ALTUS
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