Combined economic uncertainty and inclement weather did no favours for the Lower Mainland housing market in February, as sales volume sharply retraced and prices slumped. Total sales in the region spanning Metro Vancouver and the Fraser Valley reached only 2,684 units during the month, which was 17.3 per cent lower than same-month sales in 2024. Seasonally adjusted sales, by our calculation, fell nearly 20 per cent to the trough of 2023, driven largely by Greater Vancouver. While snowy conditions kept some activity on the sidelines, there is little doubt in our view that tariff uncertainty and recession risk weighed on buyer confidence despite declining borrowing costs. Housing is one of the largest—if not the largest—purchase households make in their lifetime, and the risk of job loss can quickly derail confidence. Through the first two months of 2025, home sales were down 9.9 per cent in a subdued start to the year.
On the supply side, new listings growth slowed in February, consistent with some drag from the weather, but 49 per cent higher than a year ago. That said, inventory continued to rise with a 38-per-cent, year-over-year jump and is trending at a level last seen in 2019 and 2014. More sellers have come out to test the market, and investors may be divesting amid headwinds facing international students and short-term rentals. Existing condos are also in competition with ballooning new home inventories.
The market is now trending in a buyers’ market with a sales-to-active listings ratio at 14 per cent as sellers face more competition and mild demand. While the average price nudged up 1.6 per cent to $1.159 million, this was in part seasonal growth. The average price was down 2.2 per cent year over year, and 3.6 per cent month to month, adjusting for seasonal factors. The constant-quality housing price indices eroded and fell 1.6 per cent year over year, owing largely to declines for multi-family units.
Housing market conditions will be contingent on U.S. policy going forward and its potential impacts on the local economy. If there are signs that tariffs will be delayed indefinitely, we expect buyers to return to the market given lower interest rates, federal policies to boost accessibility and pent-up demand on the sidelines. If tariffs come back on, the opposite will be true. Broad uncertainty will likely remain a headwind.
Meanwhile, employment in British Columbia declined 0.2 per cent in February, following a notable January increase. This translated to a decrease of 4,800 people. February results paused the positive momentum in provincial employment since last October. The pace of year-over-year employment growth in B.C. continued to trend lower at one per cent. The unemployment rate was flat at six per cent, and the labour force in the province contracted by 0.2 per cent. The labour participation rate fell to 64.9 per cent from 65.2 per cent, along with a 0.1-per-cent increase in population.
Part-time employment led the monthly decrease. Full-time employment grew by 0.2 per cent or 5,500 people, while part-time employment dropped by 1.7 per cent or 10,200 people. The Vancouver census metropolitan area saw a 0.5-per-cent increase in its employment level, while the unemployment rate rose to seven per cent from 6.8 per cent.
By sector, goods-producing industries recorded lower employment. Declines in hiring among categories such as construction (down two per cent or 5,200 people) and utilities (down 14.7 per cent or 2,600 people) offset growth in agriculture (up 24.5 per cent or 2,400 people). Services-producing industries reported a modest 0.1-per-cent increase in employment. Health care and social assistance led the group with a gain of 1.2 per cent (4,900 people). Finance, insurance, real estate, rental and leasing also grew by 1.8 per cent (3,400 people). That said, these increments were offset by large declines in professional, scientific and technical services (down 3.7 per cent or 11,700 people).
Bryan Yu is chief economist at Central 1.
