On September 17, 2025, the Bank of Canada reduced its key policy interest rate by 25 basis points, bringing it down to 2.50%. This is the lowest level in three years and its first cut since March.

This move came as the Canadian economy showed signs of weakness: GDP contracted by ~1.6% in Q2, more than 100,000 jobs were lost over two months, and unemployment rose to a nine-year high (excluding pandemic years).
Inflation is easing but remains within the target range—core CPI is hovering around 2.5% to 3%, and headline CPI is at 1.9%.

Governor Tiff Macklem emphasized the decision was unanimous and signalled further cuts may follow in October, potentially reaching 2.25% by late 2025.

What It Means for the Canadian Housing Market

1. Market May Heat Up Further

Lower policy rates generally reduce borrowing costs. Mortgage lenders are expected to pass on this reduction - variable mortgage rates are likely to drop by about 0.25%, undercutting current borrowing costs and potentially boosting affordability.
Cheaper loans may prompt buyers who had delayed purchasing to re-enter the market, especially in high-demand cities like Vancouver and Toronto.

2. Potential for More Qualified Buyers

As mortgage rates decline, more Canadians may now qualify for financing. With improved purchasing power, first-time buyers and investors re-evaluate affordability thresholds therefore, expanding the pool of active participants.

3. Competition May Increase

Increased demand typically brings more competition. Listings could draw multiple offers faster, particularly if supply remains constrained. Well-prepared buyers will have an edge.

🔍 What’s Next: Future Rate Cuts & Market Outlook

Analysts expect the Bank may continue easing with another cut possibly in October. Consensus forecasts suggest the terminal rate could land around 2.25% by year-end, some projections hold it at 2.75% into 2026 before gradual declines to 2.50% or below.

Still, trade-related economic risks, especially ongoing U.S. tariffs, could influence the Bank’s decisions and the broader housing market.

How to Position Yourself Now:

If you're looking to buy, sell, or refinance, here are three proactive steps:

1. Contact a Mortgage Broker

Understand your mortgage eligibility under the new rate. Ask what variable vs. fixed options are available, and whether refinancing might save you on monthly payments or increase your buying capacity.

2. Get in Touch with a Realtor

Realtors offer on-the-ground insights: hot neighbourhoods, shifting demand, and how competition is evolving. This can be invaluable whether you're buying, selling, or investing.

3. Understand Potential Market Outcomes

Know that a warmer market means faster-moving inventory and more competition. Whether you're shopping or listing, anticipate multiple offers and be clear on your strategy and financing pre-approval.

Summary

To get more information on where you stand Contact us at Coastal Key Homes.

Let’s explore three possible outcomes of the BoC decision and what each means for Vancouver buyers, sellers, and investors:

1. Scenario A: Rates Increase

(Less likely, but still worth considering)

• Would raise the benchmark from the current 2.75%, tightening credit conditions.

• Higher mortgage costs fixed and variable rates would reduce buyer affordability in Vancouver’s high-priced market.

• Likely to further dampen demand, slowing sales volumes while putting downward pressure on prices.

• Sellers may need to adjust expectations, and investors would lose appetite.

2. Scenario B: Rates Stay at 2.75%

• The BoC holds steady, continuing its third consecutive pause and citing persistent core inflation and trade-related uncertainty.

• Mortgage rates hold firm, providing stability for those renewing or shopping.

• In Vancouver, this generally translates into a steady, predictable market. This would mean neither heating further nor cooling sharply.

• Buyers and sellers can rely on existing affordability assumptions; the market remains balanced.

3. Scenario C: Rates Drop by 25–50 bps (to 2.50% or 2.25%)

➤ Cut of 25 bps (to ~2.50%)

• Lowers prime rate and variable mortgage costs; bond yields fall, reducing new fixed-rate borrowing costs.

• Lower financing costs may spur demand, lifting buyer activity in Vancouver and nudging prices upward, but gently so.

• Refinancing opportunities open up for current owners; affordability improves modestly.

➤ Cut of 50 bps (to ~2.25%)

• More substantial rate relief, variable mortgage holders would see clear monthly savings; fixed-rate borrowers gain if rolling into lower-yield terms.

• Stronger market momentum: refreshed buyer confidence, potential uptick in showings, listings, and transactions.

• Could attract investors or first-time buyers who had been waiting on lower rates.

Vancouver Market Spotlight

• With median home prices typically well above $1 million, even modest rate changes materially affect mortgage payment amounts and qualifying thresholds.

• Lower rates offer a chance to qualifying for a larger mortgage or higher budget, especially critical in Vancouver’s tight inventory environment.

• Refinances or renewals unlocked by lower rates can reduce household financial stress and free up discretionary funds.

• Sellers should note: a cut could expand buyer pools, making September and early fall a strong window to list.

Key Drivers to Watch Before the Announcement

• August inflation prints especially core inflation, which remains stubbornly above 3% despite headline inflation cooling to ~1.7%.

• The trade environment, including softening U.S. tariffs and Canada’s rollback of retaliatory duties, which may ease domestic inflation pressures.

• Latest employment & GDP data across both Canada and the U.S.; markets expect some movement in the Fed as well, which could influence BoC sentiment.

What Should You Do?

1. Buyers & Borrowers:

   • If rates drop, seize opportunities to lock in more affordable financing or increase your target budget.

   • With rates steady or rising, act now before rates potentially climb or inflation remains sticky.

2. Sellers:

   • If rates cut, fall inventory and rising demand could work in your favour—strategic listing timing matters.

   • If steady or up, manage pricing carefully and monitor local buyer sentiment.

3. Investors & Renewers:

   • Lower rates can offer better cash flow, especially for variable-rate loans.

   • Renew or refinance sooner—don't wait if cuts materialize.

Coastal Key Homes: Your Vancouver Real Estate Partner

At Coastal Key Homes, we specialize in helping Vancouver clients navigate uncertain rate environments. Whether rates go up, hold, or head down we have your back.

• Buyers: We'll help analyze affordability and secure optimal mortgage solutions.

• Sellers: We time your listing for maximum impact and guide you through pricing strategy.

• Investors: We offer long-term return modelling based on rate scenarios and market trends.

• 
  Get in touch with Coastal Key Homes today to plan your next move and with confidence. Whether you're buying, selling, refinancing, or investing, we’re here to tailor opportunities to your needs in Vancouver’s dynamic market.

Whatever the Bank of Canada decides on September 17, 2025, we're ready. Reach out to Coastal Key Homes for expert insights and real-estate strategy tuned to current and future rate landscapes.

The Metro Vancouver housing market saw a subtle but important shift in August 2025. With prices easing across most property types, more buyers stepped off the sidelines, bringing a small but notable increase in sales activity compared to the same period last year.

According to the Greater Vancouver REALTORS® (GVR), a total of 1,959 residential sales were recorded on the MLS® in August 2025. That’s a 2.9% increase from August 2024, though still 19.2% below the 10-year seasonal average of 2,424.

While overall activity remains below long-term norms, the numbers point to signs of recovery after a slower start to the year.

Key Takeaways for August 2025

• Sales volumes: Up nearly 3% year-over-year.

• New listings: 4,225 properties hit the market in August – slightly above both last year (+2.8%) and the 10-year seasonal average (+1.3%).

• Total inventory: 16,242 active listings, a 17.6% increase compared to last year and nearly 37% above the 10-year average.

• Sales-to-active listings ratio: 12.4% overall (detached: 9.3%, townhomes: 15.8%, condos: 14%). This places most of the market in balanced territory, though detached homes remain softer.

• Benchmark prices: Metro Vancouver’s composite benchmark sits at $1,150,400, down 3.8% year-over-year and 1.3% month-over-month.

Market Insights

“Sales in the detached and attached segments are up over 10% from last August, which suggests buyers shopping in more expensive price points are re-entering the market in a meaningful way,” explains Andrew Lis, GVR’s Director of Economics and Data Analytics.

This is reflected in the breakdown:

• Detached homes: 575 sales (+13% YoY), benchmark price $1,950,300 (down 4.8% YoY).

• Townhomes (attached): 409 sales (+10.5% YoY), benchmark price $1,079,600 (down 3.5% YoY).

• Condos (apartments): 956 sales (-5.5% YoY), benchmark price $734,400 (down 4.4% YoY).

Across the board, prices have softened between 1%–2% month-over-month and are sitting below 2024 levels. Sellers appear increasingly willing to adjust expectations, helping buyers and sellers find more common ground.

What This Means for Buyers

For those looking to purchase, current conditions are relatively favourable:

• More choice: Inventory is at one of the highest levels in the past decade.

• Better prices: Benchmarks are down 3 - 5% year-over-year depending on the property type.

• Less competition: With the sales-to-active listings ratio near balanced levels, bidding wars are less common than in past years.

That said, if sales activity continues to rise while new listings remain flat, today’s window of opportunity could narrow heading into fall.

What This Means for Sellers

While prices have dipped modestly, motivated buyers are returning - particularly in the detached and townhouse markets. Sellers who price competitively are more likely to attract serious buyers and secure deals in today’s more balanced environment.

Long-Term Perspective

Despite short-term price declines, Metro Vancouver real estate has shown remarkable long-term resilience:

• Up 22% over the past 3 years

• Up 43% over the past 5 years

• Up more than 40% over the past decade

For both buyers and investors, this underscores real estate’s role as a stable, appreciating asset in the Vancouver region.

Final Thoughts

The Vancouver market in August 2025 reflected a more balanced and accessible environment than we’ve seen in recent years. Easing prices and higher inventory have opened opportunities for buyers, while sellers are finding that realistic pricing leads to steady sales.

As we move into the fall market, the balance between new listings and buyer demand will determine whether today’s favourable conditions for buyers continue, or whether tightening supply begins to push prices upward again.

Thinking about making a move?
Whether you’re buying, selling, or just keeping an eye on the market, having the right strategy is key. At Coastal Key Homes, we help clients navigate Vancouver’s ever-changing real estate landscape with data-driven insights and personalized guidance.

📞 Contact us today to explore your opportunities in Metro Vancouver real estate.

The Vancouver and Greater Vancouver real estate market has been in a period of transition (as you can see from my previous blogs). After years defined by frenzied bidding wars, rapid appreciation, and a sense of inevitability that “prices only go up,” the landscape has shifted - big time. Inventory is climbing, prices are softening, and sellers are slowly adjusting expectations to meet the new markets demands.

For the first time in years, the power balance is tilting back toward buyers.

The Numbers Behind the Shift

• Inventory Growth: Listings across Greater Vancouver continue to climb month over month. Detached, townhouse, and condo inventory all remain elevated compared to recent years. Though sales have creeped up month over month, we are still in a stand still over more inventory and less sales. 

• Slower Sales: We’re also seeing record low sales volumes, which means more listings are sitting longer without offers.

• Prices Easing: The average price per square foot is slowly declining, not in a dramatic crash, but in a steady downward trend that’s been playing out for over a year.

• Days on Market Rising: Properties are spending longer on the market. Homes that would have sold in a week in 2021 are now lingering for 30, 60, even 90+ days.

This combination of all the above means as a buyer we have more choices, slower absorption, and softer pricing. This creates leverage for buyers.

What’s Selling (and What’s Not)

Not everything is being impacted equally.

• Still Selling: Properties with excellent layouts, renovated interiors, or prime locations continue to move. But they’re trading at reduced prices compared to the 2021/2022 peaks.

• Lingering Listings: One-bedroom condos, homes needing renovations, and investment properties that don’t pencil out under current financing conditions are sitting much longer. Short-term rental restrictions and higher material costs have further dampened demand in these segments.

For buyers, this creates a two-tiered market: good homes at fairer prices and overlooked homes where serious deals can be negotiated.

The Developer Dilemma: Today’s Pain, Tomorrow’s Shortage

The new-build sector is under heavy pressure. Developers are grappling with higher interest rates, rising construction costs, and stricter lending requirements. Many projects are being delayed or shelved entirely. In some cases, we are even seeing receivership for properties. 

Why This Matters for Buyers:

1. Negotiation Power: Developers with active projects are motivated to show sales to lenders. This creates opportunities for buyers to lowball on pre-sales and secure significant incentives.

2. Future Supply Squeeze: With fewer projects breaking ground today, we’re setting up for an undersupply of new housing in 3–5 years. That could mean a rebound in pricing when the next wave of demand hits.

If you’re considering pre-construction, the window to secure a below-market deal may never be better.

Layered Incentives: Why New Builds Under $1.1M Are a Sweet Spot

Recent government policy has opened the door to unique savings:

• No GST on new builds under $1.1M (Federal).

• No Property Transfer Tax on new builds under $1.1M (Provincial).

For first-time buyers, this can mean tens of thousands of dollars in savings. Targeting pre-sales or nearly completed units under $1.1M is a strategy worth serious consideration.

Pro tip: Look at 2024–2025 completion projects under $1.1M. Developers want those units moved, and you can stack the incentives for maximum value.

The Psychology of Today’s Market

The market isn’t driven purely by numbers - it’s driven by people. Right now, we’re seeing:

• Sellers Anchored to Yesterday: Many homeowners are still pricing based on 2021 valuations. When listings sit, they eventually reduce, creating opportunities for buyers willing to wait.

• Buyers Hesitant, Sitting on the Sidelines: Fear of “buying at the wrong time” is keeping many would-be buyers out of the market. Of course, this reduces competition for those who are ready to act.

• Investors Stepping Back: With higher interest rates, stricter tax policies on secondary properties, and short-term rental restrictions, many investors are no longer absorbing inventory. This leaves more room for end-users.

Neighborhood Insights: Where to Look

Different parts of Greater Vancouver are experiencing the shift in unique ways:

• North Vancouver: Inventory is stacking up in areas like Lower Lonsdale condos, while detached homes in Upper Lonsdale and Lynn Valley show more realistic pricing.

• Burnaby & New Westminster: A surge in new condos has created leverage for buyers, particularly around Brentwood and Metrotown.

• East Vancouver: Older character homes needing updates are sitting longer, while turnkey properties still sell quickly.

• West Side Vancouver: High-end listings remain aspirational in pricing, creating some of the deepest negotiation opportunities for well-qualified buyers.

Understanding the micro-markets is key—some areas are softening faster than others.

The Long-Term Outlook

Real estate is cyclical. Right now, we’re clearly in the downward or flat stage of the cycle. Will prices fall further? Likely modestly, as sellers continue to adjust. But history tells us there will be a threshold where institutional buyers, government programs, or pent-up demand steps in.

What’s certain:

• Buyers finally have room to negotiate today.

• New supply is being choked off, setting up future pressure.

• Those who buy smart now will be well-positioned when the cycle turns again.

Final Word: Don’t Chase FOMO, Seize Strategy

If you’re buying in this market, buy for the right reasons: because you can afford it, you love the property, you have the means to develop or renovate and you plan to hold it long term.

This isn’t 2021 - you don’t need to waive conditions or outbid 20 other buyers. Instead, you can approach the market strategically, with patience, negotiation, and contingencies intact.

Ready to Find Your Opportunity?

At Coastal Key Homes, we specialize in helping buyers cut through the noise, identify hidden value, and negotiate from a position of strength. If you’ve been waiting for the right moment to step into the market - this may be it.

Contact us to begin your journey today. 

📞 Contact us 778-836-8965
📧 Email us at Ian.iacovitti@gmail.com