rennie landscape

PURCHASING POWER TO THE PEOPLE

The deterioration of housing affordability over the past few years in Canada has been well documented. Indeed, home buyers and home owners were hit by the double whammy of rapid price growth during the pandemic followed by rising interest rates: home prices peaked in the spring of 2022 while the Bank of Canada policy rate was at its apex from July 2023 through May 2024. Peak unaffordability, as measured by comparing the monthly mortgage payments required by the combination of benchmark prices and variable interest rates, hit in April of 2024, when rates were at their highest and prices had recovered some of their losses in 2022 and 2023.

Since the spring of 2024, however, affordability has improved markedly. The Bank of Canada had lowered its policy rate by 225 basis points through August (and by another 25 basis points in September). Prices have been falling as well, with the benchmark price in the Vancouver Region now lower in August 2025 than in August 2022. The combination of variable rate and benchmark price in August of this year yields more affordability than in August 2022, meaning purchasing power has reached a 3-year high for consumers. While some homebuyers may be longing for the affordability levels seen prior to the pandemic, this recent trend of rising affordability is significant, and allows those buyers who are willing to re-engage with the housing market a greater degree of confidence.

NOT FOR SALE

Rental housing construction is having a bit of a renaissance in BC. After decades of limited rental development—two-thirds of BC’s purpose-built rental homes were built before 1980 and three-quarters prior to 1990—rental construction has been on the upswing over the past few years. The most recent data from CMHC show that there are more purpose-built rental homes under construction in the province today (over 34,000) than at any point since the agency started publishing such data in 1990.

A challenged pre-sale market is a factor here, but so are policies aimed at boosting the supply of rental, including municipal zoning changes in places like Vancouver, the MLI Select program, and the GST rental housing rebate, among others.

Here in Metro Vancouver, the pipeline of future rental homes has expanded dramatically over the past few years, with more than 18,000 market rental apartments under construction as of the end of Q2 2025. What’s more, there are also more than 75,000 homes in various stages of planning within municipalities across Metro Vancouver. In our estimation, based on where these projects sit in relation to the planning process and how long construction would take, the bulk of these pre-construction homes would be delivered in 2030 and 2031, if they all proceeded in typical fashion.

Of course not all projects proceed as planned and some never get out of the ground at all, so we evaluated the applications based on a “blue-chip” criteria—quite simply, the application is from a known developer or institution. Three-quarters of the homes in the planning process in Metro Vancouver fall within this blue-chip designation, even though they only account for about half of the applications. With rental demand softening in Metro Vancouver, as we previously discussed, it's likely that some of these projects will be shelved. Regardless, the pipeline remains well stocked for the delivery of much-needed rental homes in the future.

A STORY ABOUT INVENTORY

We discussed in the previous edition of the rennie landscape the growing trend of completed and unsold condo inventory in markets across BC, particularly in Metro Vancouver. This time, we zoom out and look at this phenomenon over a longer period of time historically, along with a longer-term forecast.

Since the middle of 2022, the amount of completed and unsold inventory in Metro Vancouver has doubled three times, from 300 to 2,647 as of the end of Q2 2025. The number of unsold condos in projects under construction remains robust as well, though some construction timelines have been stretched out of late. While construction delays are a normal, if annoying, occurrence in our market, this time around they bring a silver lining. Our latest forecast for completed inventory does not project another large spike in completed and unsold condos until 2028, assuming the market continues at a similar pace of absorption. There is still ample choice for buyers looking for new homes to move into, but the market has a little time to  absorb current under construction and completed inventory.

LEVEL RESET

Home prices and average asking rents have followed somewhat similar trajectories in markets across BC over the past few years, albeit over different timelines. Home prices grew rapidly from the second half of 2020 before peaking in the middle of 2022. Average asking rents, on the other hand, experienced rapid increases through the summer of 2023, and have fallen more sharply since then.

The relationship between prices and rents can be observed via the price-to-rent ratio (price divided by annualized rent), which can be of particular interest to investors, but can also influence the decisions of first time buyers. In Metro Vancouver, the price-to-rent ratio underwent a correction in 2022, after rising over the prior 18 months, as prices began to fall while rents were still rising. In Surrey and Richmond, the ratio tipped back into moderate territory. Since the summer of 2023, however, the ratio has been steadily rising though remains below the 2022 level for each of the largest rental submarkets in Metro Vancouver. That said, they all have high price-to-rent ratios, suggesting investors pay a premium for their rental properties in those jurisdictions.

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