British Columbia's housing market presented a complex picture in December, with home sales remaining sluggish while housing starts saw an increase. However, experts caution that the apparent gains in new construction do not signal underlying market strength, as these projects are often planned years in advance.
Key Takeaways
- December saw a 1.1% drop in B.C. MLS sales, concluding a year of poor performance with a 5.7% annual decline.
- The Greater Vancouver region experienced a significant 5.4% decrease in sales in December.
- Home values continue to ease, with the average price falling 1.6% in December and 5.5% year-over-year.
- Housing starts increased for the second consecutive month, but full-year starts declined by 4.7%.
- Underlying weakness is expected to persist, particularly in the Lower Mainland, due to economic uncertainties and excess inventory.
Resale Market Struggles
In December, British Columbia's resale market experienced a 1.1% decrease in seasonally adjusted home sales, reversing the modest gains seen the previous month. This brought the total annual sales for the year to 70,233 units, a 5.7% drop and one of the lowest levels recorded since 2012. High prices and economic uncertainties were identified as major deterrents, especially in expensive markets like the Lower Mainland.
The Greater Vancouver region saw a notable 5.4% decline in sales for December, while Vancouver Island (excluding Victoria) experienced a 6.3% drop. Despite these downturns, some areas like the Okanagan reported higher sales. Annually, Greater Vancouver's sales plummeted by 10.2%, a trend partially offset by stronger performance in the southern interior.
Easing Home Values
While home values remain elevated, they are continuing to soften. The average home price in B.C. decreased by 1.6% in December to $953,200, marking a 5.5% year-over-year decline. Quality-adjusted benchmark prices, a more reliable indicator of market trends, saw only a slight increase of 0.1% in B.C. but fell 6.5% annually. The average annual home price for the province slipped to $953,300 in 2025, down 2.9% from the previous year. The most significant annual price declines were observed in the Lower Mainland, which fell by 5.3%.
Housing Starts Show Mixed Signals
Housing starts in B.C. increased for the second month in a row, rising by 15.6% in December to a seasonally adjusted annual rate of 46,350 units. This growth was primarily driven by activity in Vancouver and Victoria, with both multi-family and single-family home starts showing increases. However, this monthly fluctuation masks a broader trend, as full-year housing starts for B.C. declined by 4.7%. The province was among those experiencing fewer starts, largely due to a weakening in homeownership products, while rental starts gained market share due to stronger demand and more favorable financing. Experts predict that weak resale market conditions, low pre-sales, and declining rents will likely lead to a reduction in housing starts in 2026.
Outlook for the Market
Bryan Yu, chief economist at Central 1, suggests that the weakness in the B.C. housing market, particularly in the Lower Mainland, is likely to persist. Factors contributing to this outlook include low population growth, increased economic and geopolitical uncertainty impacting buyer confidence, and an excess inventory of both new and existing homes. Sales volumes are expected to remain below long-term historical patterns, although steady mortgage rates and wealth effects from strong equity markets may offer some support.
