What Happened

TD has forecasted that Vancouver condo prices will decline by another eight per cent this year before stabilizing in 2027. This projection places Vancouver alongside Toronto as a market heading toward a historic meltdown, though the bank distinguishes the two cities' underlying dynamics. While Toronto is often viewed as the poster child for a condo collapse, Vancouver’s decline is driven by different market forces and remains less severe in comparison. The forecast comes as Vancouver condo prices have been falling for almost four years and are still searching for a floor. In contrast, Toronto’s market is grappling with a historic supply glut as investors sell off properties due to falling rents and higher carrying costs. TD expects Toronto condo prices to fall meaningfully below pre-pandemic levels, whereas Vancouver prices are projected to remain above those benchmarks after the current downturn.

Why It Matters

The TD forecast highlights a significant divergence in the health of Canada’s two largest condo markets. While Toronto’s crisis is rooted in an investor-driven supply glut, Vancouver’s slump reflects a broader market correction where prices are still adjusting after years of decline. The distinction matters because Vancouver’s condo market is more heavily driven by owner-occupiers rather than pure investors, making it somewhat more resilient to the worst-case scenarios seen in Ontario. However, the continued decline signals ongoing weakness in demand and confidence among buyers who are still searching for a price floor. This trend suggests that the Vancouver market is not yet out of the woods, despite being less severe than Toronto’s collapse.

Local Vancouver / Burnaby Context

Vancouver’s condo market has been under pressure for nearly four years, with sales declining and projects stalling due to multiple factors. The city’s housing market is characterized by a higher-priced entry point, which keeps condos as an attainable option for many first-time buyers compared to detached homes. This owner-occupier focus differentiates Vancouver from Toronto, where investor activity has played a larger role in the current downturn. Local data indicates that Vancouver condo sales have fallen 37 per cent, while Toronto’s have dropped 75 per cent. The market is still adjusting to higher interest rates and economic uncertainty, with prices remaining below their 2022 peaks. The forecast of an additional eight per cent drop suggests that the correction is still in progress, with no clear bottom in sight yet. This context is critical for understanding the pace and depth of the current market adjustment in the Greater Vancouver area.

Market Impact

The forecasted decline will likely continue to pressure sellers and developers in the Vancouver condo market. Owners may face reduced equity and longer listing times as buyers wait for further price drops. Developers may encounter tighter financing conditions and lower pre-sale success rates, potentially leading to more stalled projects. The market may see increased inventory as owners try to exit before prices fall further. Renters may benefit from a potential increase in rental supply if some owners decide to lease out their units instead of selling at a loss. Overall, the market is expected to remain soft until prices stabilize in 2027.

Builder / Developer Perspective

Developers in Vancouver are likely facing increased scrutiny from lenders due to the ongoing market slump. Pre-sale success rates may decline as buyers become more cautious, leading to potential cancellations or delays in project timelines. The forecasted price drop may reduce the feasibility of new projects, especially those with high land costs. Developers may need to adjust their pricing strategies and marketing efforts to attract owner-occupiers rather than relying on investor demand. The market’s softness may also lead to more consolidation among smaller developers.

BurnabyHouse Insight

Vancouver’s condo market is in a prolonged correction, distinct from Toronto’s investor-driven crash. While the decline is significant, the owner-occupier base provides some resilience. However, the forecasted eight per cent drop indicates that the bottom is not yet in. Buyers should remain patient, while sellers and developers must prepare for a longer, softer market. The key differentiator is that Vancouver’s market is still driven by those who need to live in their homes, not just those speculating on price gains. This makes the recovery potentially more stable once it begins, but also slower to arrive.