After a pivotal year in real estate shaped by political shifts and technological innovation, 2025 holds great promise. The upcoming Lunar New Year welcomes the Year of the Snake—a symbol of wisdom, adaptability, and transformation. Overall, last year marked a modest rise in Greater Vancouver home sales of 26,561, up 1.2% from 2023, yet a 9.2% decline from 2022. However, last year’s total remains 20.9% below the 10-year average.
Nearly on par with the number of sales recorded during the financial crisis in 2008, it's been a challenging couple of years for the real estate industry after record sales in 2021. 2024 acted as a pivot year, attributing the late rise in buyer activity to decreasing borrowing costs after a period of high mortgage rates. It was a year of inventory, as there was a total of 60,388 properties listed in 2024, an 18.7% increase from 2023, and 9.7% above 2022, surpassing the 10-year average by 5.7%.
Home sales increased 30% in December compared to the previous year, signalling an emerging pattern of strength in home sales, building on the momentum seen in previous months. Recent sales figures are trending back toward long-term historical averages, indicating potential upside for sales in 2025 if the current momentum holds. The current composite benchmark price for all residential properties stands at $1,171,500, reflecting a slight increase of 0.5% from December 2023. Despite the challenges, the recent sales figures suggest potential growth throughout 2025.
BC Assessments 2025 property assessments, which reflect market value as of July 1, 2024, were announced for property owners on New Year's eve of more than 1,120,000 properties throughout the Lower Mainland. Across the Lower Mainland and throughout B.C., the overall housing market has generally stabilized in value for a second consecutive year. Most homeowners can expect only modest assessment changes in the range of -5% to +5%.
Bear in mind, these valuations are generated by a computer algorithm each July and shouldn’t be used as a benchmark for current market values. It may not factor in qualitative data like the most recent comparable sales, external influences, home improvements, and local market dynamics. The housing market is highly volatile with values shifting every few months.
Chip Wilson’s Point Grey residence remains the most valuable property in British Columbia, commanding a taxable value of $82,664,000. This is a slight increase from the previous year’s assessment of $81,765,000, reaffirming Point Grey's desirability. Homes in the area typically range from $1m to $50m.
BC Strata Assessments
Property Tax Increase Vancouver City Council has approved a property tax increase of 3.9% for 2025, amounting to a $2.4 billion budget. The final vote came after amending a proposed 5.5% increase, resulting in a $9.4 million reduction. For residents, this translates to an approximate annual increase of $54 for condos and $149 for single-family homes.
BC Assessment Property Tax Change
Short-Term Rental Registry The Ministry of Housing is ramping up efforts to regulate illegal short-term rental listings in British Columbia, targeting over 1,500 units as the province prepares to launch its new registry. This initiative, part of the new regulations enforced since last May, aims to ensure that owners adhere to rental compliance standards.
B.C. Housing Minister Ravi Kahlon announced that most of these illegal listings came to their attention through public complaints. Following guidance from the province's 11-person enforcement team, many owners have taken immediate steps to comply with the regulations. However, 75 cases remain open for investigation, with potential fines of up to $5,000 per day for those found in violation.
Under the new rules, property owners can only rent their primary residence or a unit on their property, such as a laneway house or secondary suite. Compliance also requires registration with the local municipality and maintaining a valid business license, which set at $1,060 for 2025. About 1,300 of the non-compliant cases arose from public complaints (largely thanks to social media platform X), showcasing the community's role in monitoring rental practices.
Kahlon highlighted positive outcomes from these changes, noting a 10% reduction in full homes listed as short-term rentals. This shift indicates that these properties are increasingly being made available for either sale or long-term rentals, helping to address housing availability in a tight market. As the second phase of enforcement approaches, there is optimism about the regulations' impact. However, some critics have raised concerns about the potential unintended consequences of these restrictions, particularly regarding the balance of rental availability and the needs of residents.
Airbnb Registry
Anti-Flipping Tax The new Residential Property (Short-Term Holding) Profit Tax Act came into effect January 1, 2025, and applies to homeowners who sell their home within two years of purchase. This legislation aims to deter short-term speculation in the housing market. Homes resold within the first year will face a 20% tax on profits, gradually decreasing until it is eliminated at 730 days. Exemptions include certain primary residences, though they are subject to specific conditions and filing requirements. Approximately 7% of homes sold in B.C. between 2020 and 2022 were resold within two years, according to the provincial government.
Mortgage Renewals About 1.2 million mortgages will require renewal, with CIBC projecting that approximately 40% will experience reduced payments. While 50% may face a payment shock of around 20%, the overall impact should be manageable given the significant rises in wages and home prices over the past five years.
Additionally, demographic shifts are reflected in the Canadian housing market, with a potential contrast between low-rise and high-rise segments. The latter remains in a downturn amidst high completion rates. However, supply constraints are likely to emerge by mid-2026, spurring upward pressure on prices as demand grows amidst declining inventories.
Market Forecasts and Trends The Royal LePage annual Market Survey Forecast predicts a modest 4% increase in home prices for Vancouver in 2025, in contrast to higher projected gains in Toronto (5%) and Montreal (6.5%). The market has experienced a supply build-up, with many potential sellers remaining hesitant due to high prices. Experts anticipate a renewed demand in lower inventory segments as borrowing conditions improve.
Population Dynamics The Canadian government intends to cap population growth, reducing net temporary resident numbers by about 446,000. However, achieving these goals may prove difficult due to rising asylum claims and an increase in work permits. The implications of these changes will further influence the rental landscape and overall market conditions.
Decoupling of commissions comes to Canada Following a landmark $418 million settlement reached by the National Association of Realtors in the U.S., this agreement, stemming from a class-action lawsuit by home sellers, instigated a major restructuring of how real estate agents are compensated. While these changes primarily affect the American market, the CEO of eXp Realty predicted that the decoupling of commissions in real estate transactions signal a potential ripple effect that could soon reach Canada.
Historically, the practice in Canada has mirrored that of the U.S., where sellers typically cover the commissions for both their agents and the buyers' agents. Commission splits have been prominently displayed on multiple-listing services, facilitating transparency regarding what buyers' agents can expect to earn. However, a growing consensus has emerged that these longstanding practices may soon undergo scrutiny as the Canadian real estate market adapts to new norms.
The U.S. changes, which effectively decouple the commissions for sellers' and buyers' agents, could lead to an environment where negotiating commission rates becomes more straightforward for sellers—an outcome that we could witness in Canada if similar legal challenges arise. Recent developments indicate that Canadians may soon find themselves in a more competitive and transparent real estate market.
AI Natural Language Processing
Artificial Intelligence is mainstream AI-first tools are transforming the rental and homebuying experience, with broader adoption expected in 2025. Virtual assistants capable of scheduling tours and prospecting are becoming mainstream. AI is reshaping the market by offering hyper-personalized recommendations, automating complex tasks, and providing insights that reduce stress and guesswork. Searching for a home with only Natural Language Processing. It’s also enhancing property valuations and market-readiness advice, from kitchen remodel suggestions to budget-friendly landscaping plans.
Major players are already partnering to elevate AI-powered search experiences. This is the year the technology catches up to consumer expectations, delivering a more intuitive, data-driven real estate journey. On the venture front, 2024 saw steady AI adoption and billions in funding—most notably $6 billion raised by xAI.
TIL: The film "Her" is set in year 2025. That scene when Theodore finds out his AI girlfriend Samantha (Scarlet Johansson) cheated on him. Spike Jonez made the film in 2013 and clearly, if not prophetically, nailed the AI zeitgeist.
Theodore: You talking to anyone else? Samantha: Yeah. Theodore: How many? Samantha: 8,316. Theodore: Are you in love with anyone else? Samantha: I’ve been figuring out how to talk to you about this. Theodore: How many others? Samantha: 641.
It feels like we’re entering a golden age. Wishing you a prosperous New Year ahead.
