The Canadian Real Estate Association (CREA) recently released its updated forecast, highlighting key insights into the real estate market trends for 2024 and 2025. For British Columbia and Canada overall, the forecast provides a glimpse into expected home prices, sales activity, and how shifting interest rate expectations might influence market movements in the coming years.
British Columbia Real Estate Performance: 2023, 2024, and Projections for 2025
In 2023, British Columbia’s real estate market saw a slight decline, with the average home price dropping by 2.6% to approximately $970,680. This dip mirrored broader national trends, largely due to high-interest rates impacting buyer affordability and enthusiasm.
For the end of 2024, CREA expects a modest price increase of 0.8%, pushing the average home price to about $978,597. This restrained growth aligns with cautious optimism as interest rates are stabilizing, potentially encouraging more buyers to return to the market. By 2025, home prices in British Columbia are forecasted to reach $991,360, representing an additional 1.3% growth.
Sales activity has also experienced shifts. After a 9.2% decline in 2023, with 73,087 units sold, a slight decrease of 1.3% is projected in 2024. However, a more substantial recovery is anticipated in 2025, with a projected 8.5% increase in transactions, totaling 78,225 units as lower interest rates bring more buyers off the sidelines.
If you're wondering how these projections might influence your buying or selling strategy, consider a tailored market analysis for your area to get insights specific to your goals.
National Trends: Canada’s Market Activity and Price Predictions
Across Canada, the real estate market faced similar challenges in 2023, with the national average home price falling by 3.7% to $677,346, alongside an 11.2% drop in sales activity with 445,601 units sold. High-interest rates played a major role in this cooldown, prompting many potential buyers to delay their plans.
Looking forward, CREA predicts a steady national recovery. For 2024, the national average home price is expected to rise by 0.9% to $683,203, with a more substantial 4.4% increase in 2025, bringing average prices up to $713,374. Sales activity is forecasted to follow a similar path, with growth of 5.2% in 2024 (468,909 units) and 6.6% in 2025 (499,816 units).
Changing Buyer Expectations and the Interest Rate Factor
Initially, CREA anticipated the first rate cuts to entice buyers back to the market by mid-2024. However, with more variable rate reductions likely on the way, there has been little movement. It’s possible the type of buyer who was, until recently, entering the market with a three-year fixed rate mortgage has decided to hold off for even better rates that now seem just around the corner, but the risk adverse type might be disappointed as fixed rates are now increasing since the American election and the mortgage qualification amount/rate you need to qualify for as part of the stress test has not changed. This delay has prompted CREA to adjust its sales and price projections, indicating that the bulk of market growth may emerge in the latter half of 2025.
This shift in buyer behavior reflects a growing preference for securing lower-rate mortgages, encouraging many to hold off on purchases until conditions improve. As rates expected to decrease more heading into 2025, sidelined demand is expected to fuel a stronger market rebound.
The Bigger Picture: Historical Context and Forecasted Trends
CREA’s forecast charts—highlighting historical and projected Residential Average Sale Price and Sales Activity—provide valuable context for today’s market. Over the decades, Canadian home prices have shown steady growth, with recent adjustments marking a temporary pause in the trend. These visuals underscore CREA’s forecast for a stable recovery, beginning in 2024 and accelerating in 2025 as rate cuts bring buyers off the sidelines and help out home owners that need to renew their mortgage.
Final Thoughts: Insights for Buyers and Sellers in British Columbia and Beyond
For buyers in British Columbia, 2024 may offer a balanced market, with moderate price increases and lower competition. Those who can wait for interest rate reductions may find 2025 to be an ideal time to enter the market as both affordability and appreciation prospects improve. For sellers, 2024’s slight price growth offers stability, with stronger appreciation expected as we move into 2025.
As CREA’s next forecast arrives in January 2025, these updates will continue to shape strategies for those considering a real estate move. Keeping informed will be crucial for making timely and savvy decisions in this dynamic market.
Are you considering buying or moving in 2025? Timing is everything, and now is the perfect moment to start planning. If you’d like a personalized strategy to help achieve your real estate goals, reach out—I’d be happy to help!
Hope you have a great week and we are always here for you if you ever need anything from us.
Mark and Maddie Coons
Selling Kelowna Real Estate Group
778-744-0872
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