2026 Outlook—Year of the Fire Horse January 09, 2026

As 2026 unfolds into the Year of the Fire Horse—traditionally a symbol of momentum, optimism, and renewal—it does so against a backdrop of some of the lowest housing market activity the region has seen in more than two decades. Activity remains subdued following a challenging year marked by hesitant buyers, rising inventory, and modest price adjustments across most property types. Affordability pressures persist, while ongoing policy and legal uncertainty continue to weigh on confidence.

Layered onto this environment is a significant mortgage renewal cycle moving through the system. Roughly 60% of mortgage holders renewing between 2025 and 2026 are expected to face higher payments after locking in historically low rates, bringing renewed financial pressure and forced decision-making into focus. This renewal wave is expected to peak around mid-year. For some households, higher payments will strain affordability; for others, they may trigger refinancing, downsizing, or delayed moves. Periods like this often mark inflection points—when markets recalibrate and opportunity begins to emerge for those prepared to act deliberately.

2026 property assessments signal broad-based value declines

BC Assessment has released 2026 property assessment values for approximately 1.14 million properties across the Lower Mainland, reflecting market conditions as of July 1, 2025. The data shows a broad softening in values across most communities, with total assessed value declining from roughly $2.01 trillion in 2025 to about $1.92 trillion in 2026. Many single-family and strata properties recorded year-over-year decreases, generally ranging from flat to down around 10%, as the housing market cooled.

Even high-end properties were not immune. Chip Wilson’s Point Grey estate saw its assessed value fall to approximately $73.5 million, down from last year. This marks the first broad-based assessment decline since 2020 and has resulted in the BC Home Owner Grant threshold being lowered to $2.075 million for 2026.

Cowichan ruling deepens uncertainty

Land and title uncertainty has become a growing issue in British Columbia’s real estate and development landscape. Ongoing legal ambiguity following a recent British Columbia Supreme Court decision involving the Cowichan Tribes has raised broader concerns around Aboriginal title. While the court has paused declarations for up to 18 months pending appeal, questions around co-ownership risk, permitting certainty, financing, and land valuation remain unresolved across the market.

The impact is already tangible. Montrose Property Holdings has publicly stated it lost a $35 million lender and multiple tenants after investing roughly $7.5 million into a warehouse project, citing title-related risk on fee-simple land. Separately, a planned $98 million hotel transaction in Richmond collapsed amid heightened uncertainty and later closed for $51.5 million to a Hong Kong–based buyer. Premier David Eby has acknowledged the broader economic implications, noting that financing conditions and transaction certainty have come under pressure. With an estimated 95% of land in British Columbia subject to unresolved Aboriginal title claims, the implications extend well beyond individual projects, influencing investment decisions, development timelines, and long-term economic confidence.

To better understand whether a specific property falls within a First Nations claim area, owners and buyers can consult the provincial treaty and land claims map: Treaty Map.

Provincial housing mandates clash with municipal pushback

Tensions between local governments and the province have continued to escalate. Sixteen Metro Vancouver mayors have publicly called for a pause on elements of recent provincial housing legislation, including Bill 44, which permits small-scale multi-unit housing of up to four units on formerly single-family lots, as well as Bill 47. Municipal leaders argue the changes were imposed with limited local consultation and have raised concerns around infrastructure capacity, servicing costs, and neighbourhood pushback—issues that surfaced clearly during recent public hearings in Burnaby.

Housing Minister Christine Boyle has rejected calls to repeal the legislation, maintaining that accelerating housing supply remains necessary despite strained municipal finances. Eby has characterized the pushback as largely political, while emphasizing that municipalities will require increased federal infrastructure funding to support higher-density growth.

Development strain and rising distress in new projects

On the development side, financial pressure is intensifying. Square Nine Developments has faced multiple foreclosures across Surrey and Burnaby tied to debts reportedly exceeding $100 million, including high-interest private loans on projects such as the 30-storey One8 tower. The Belvedere site remains under creditor protection until January 31, underscoring the strain developers are facing amid tighter financing conditions and weaker presales.

At the same time, major developers including Beedie Living, Polygon Homes, Cressey Development Group, and Westbank have publicly urged federal and provincial governments to revisit Canada’s foreign buyer ban. Industry leaders argue the restrictions are weighing on presales and limiting access to capital in markets like British Columbia, where international purchasers have historically helped projects meet presale thresholds required for construction financing. These concerns have been raised directly with senior policymakers, including Prime Minister Mark Carney, federal and provincial housing ministers, and the provincial premier.

The industry is advocating for a more targeted framework—similar to approaches used in Australia—that restrict foreign ownership of existing homes while allowing investment in new construction and presales. Developers argue this would protect local buyers while supporting housing supply, employment, and project viability. Governments have so far resisted lifting the federal ban or provincial foreign buyer taxes, maintaining a focus on curbing speculation and preserving affordability. However, pressure from the development sector continues to build as builders warn of prolonged slowdowns in housing starts without policy adjustments.

AI Boom or Bubble

2026 is increasingly being framed as a potential inflection point for artificial intelligence and its influence on financial markets. A number of prominent investors and strategists have begun cautioning that enthusiasm around AI may have outpaced fundamentals. Ray Dalio of Bridgewater Associates has warned that parts of the AI trade exhibit bubble-like characteristics, while other fund managers and market strategists have advised against concentrating portfolios too heavily in AI-related equities given elevated valuations. Together, these views suggest the possibility of a valuation reset rather than a collapse.

Within private markets, many venture capital investors are increasingly expecting a shake-out among AI startups, with funding tightening and capital flowing more selectively toward companies with defensible technology, clear revenue paths, and sustainable unit economics. This dynamic reflects a broader maturation cycle, where weaker or undifferentiated players struggle to survive as expectations around growth and returns normalize.

Veteran investor Bill Gurley has echoed these concerns, criticizing excessive capital deployment and warning against growth-at-all-costs strategies. He has repeatedly emphasized the importance of discipline, profitability, and real customer demand over hype-driven narratives. Should this more cautious outlook gain traction, it could reshape capital allocation across both public and private markets—cooling speculative tech valuations while encouraging diversification beyond AI-centric investments.