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January 2025 Presale Pulse

December 19, 2024

January 2025 Real Estate Market Insights

Welcome to the January 2025 episode of the Presale Pulse, a real estate show brought to you by hosts Suzana Goncalves and Brittany Reimer. Watch the video to understand the latest macroeconomics, presale, and resale trends over the last 30 days affecting the local real estate market across Metro Vancouver and the Fraser Valley. 

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 Macroeconomics: From Rate Cuts to Political Shakeups

December brought a mix of economic shifts and challenges in Canada’s macroeconomic landscape. The Bank of Canada implemented a significant 50 basis point rate cut, reducing the benchmark rate to 3.25%, signalling some relief for buyers. However, this move was likely influenced by concerning employment data from November, which saw unemployment rise by 0.3% to 6.8%, the highest level since early 2017 outside of the pandemic. While over 50,000 full-time jobs were added, workforce growth outpaced these gains. GDP estimates for November suggested a 0.1% contraction—the first decline of the year—casting doubt on achieving the Bank of Canada’s 2% growth target for Q4. Immigration slowdowns, upcoming mortgage renewals, and potential US trade tariffs loom as risks, while the political upheaval surrounding Justin Trudeau’s resignation adds further uncertainty. Despite these challenges, a shift toward stability in governance could restore consumer confidence and provide a much-needed economic boost.

Presale: A Quiet Close to the Year

December’s presale market in Greater Vancouver and the Fraser Valley wrapped up quietly, reflecting seasonal trends. With only two project launches totalling 229 units, activity was subdued as many sales centers operated by appointment only, and several projects postponed launches to the New Year. Absorption rates for December hit 7%, the lowest since December 2020, as buyer activity slowed during the holidays. Some developers repackaged existing incentives as Boxing Day promotions to create urgency, though the market remained relatively stagnant. Developers are expected to take a measured approach into January, with three project launches anticipated to bring 279 units to market. As declining interest rates and enticing incentives continue to align, buyer sentiment is expected to gradually improve, setting the stage for more robust presale activity later in the year.

Resale: Slowdown, Stability, and Signs of Recovery

December’s resale market in Greater Vancouver and the Fraser Valley reflected the typical holiday slowdown, with activity tapering off as buyers and sellers stepped back for the season. While sales in Greater Vancouver were higher than in December 2023, they remained 15% below the 10-year average. The Fraser Valley saw its lowest sales in a decade, with over 14,000 transactions in 2024—24% below the 10-year average. Inventory growth was the dominant trend of the year, with December active listings 60% above the 10-year average in the Fraser Valley and 25% above in Greater Vancouver. Despite the increase in supply, pricing remained relatively stable, with Greater Vancouver seeing a negligible 0.1% decline year-over-year and the Fraser Valley experiencing a modest 2.0% decrease. Sellers largely held firm on pricing, anticipating gains as rate cuts throughout 2024 improved buyer purchasing power. Looking ahead, the foundation for a gradual market recovery appears to be forming, though a balanced market may take time to materialize.

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