The British Columbia Real Estate Association has released its latest third-quarter housing forecast, painting a picture of current market challenges followed by substantial recovery prospects for 2026. The comprehensive analysis reveals important trends that homebuyers, sellers, and industry professionals should understand as they navigate today's real estate landscape.
Current Market Performance and 2025 Outlook
Multiple Listing Service (MLS) residential sales across the province are projected to fall by 2.2% to 72,840 units this year, representing a continued softening from previous years. This decline reflects ongoing market adjustments and external economic pressures affecting buyer confidence.
"Trade-related uncertainty upended hopes for a more normal market through the first half of 2025," said BCREA chief economist Brendon Ogmundson. This uncertainty has created hesitation among potential buyers and sellers, contributing to reduced transaction volumes across British Columbia.
However, market conditions are showing signs of stabilization in many regions outside the Lower Mainland. Many markets are now returning to long-run average sales activity and should head into 2026 with some momentum, according to Ogmundson's analysis.
Strong Recovery Projected for 2026
The forecast presents an optimistic outlook for next year, with MLS residential sales expected to increase by 10.7% to 80,600 units in 2026. This projected growth represents a significant turnaround from current market conditions and suggests pent-up demand will be released as economic uncertainties resolve.
The BCREA is forecasting a 1.1% decline in BC home sales for 2025 amidst tariff and economic uncertainty, with a notable 8.8% rebound expected in 2026. This recovery pattern aligns with historical market cycles where periods of constraint are followed by robust growth phases.
Inventory Levels and Regional Variations
One of the most significant developments in the current market is the stabilization of housing inventory. Provincial resale inventory has reached levels not seen in more than a decade, with over 40,000 listings currently available. This inventory increase provides more choices for buyers but also creates different dynamics across various regions.
The BCREA predicts that regions with stronger underlying demand fundamentals will experience modest price growth as the market balances supply and demand. Conversely, areas with weaker demand conditions, particularly in the Lower Mainland, may continue to face downward pressure on pricing.
Price Trends and Market Balance
Prices are expected to remain stable as inventory rises, with the BCREA forecasting largely flat average prices for the remainder of 2025. This price stability reflects the current balance between available supply and buyer demand across the province.
As markets move into 2026, a slight increase in average prices is anticipated as transaction volumes recover and inventory levels normalize. This gradual price appreciation is expected to align with improved market balance and renewed buyer confidence.
Construction Activity and Housing Starts
Recent data from Canada Mortgage and Housing Corporation provides additional context for the BC housing market. Actual housing starts were up 4% year-over-year in centres with a population of 10,000 or greater, with 23,464 units recorded in July 2025, compared to 22,610 in July 2024.
However, British Columbia experienced some regional variations in construction activity. Housing starts in the province showed mixed results, with single-detached home starts declining while other housing types maintained more stable performance. These construction trends will influence future supply availability and market dynamics.
Government Initiatives and Future Supply
The British Columbia government continues implementing housing policies designed to increase supply across the province. Recent housing orders for additional municipalities aim to create approximately 40,000 homes over the next five years, representing a significant commitment to addressing housing availability.
These supply initiatives, combined with current construction activity and market recovery projections, suggest improved housing availability in the medium term. The timing of these new units coming to market will be crucial in supporting the projected 2026 recovery.
Whether you're looking to buy, sell, or simply understand your options, the experienced professionals at Coldwell Banker Horizon Realty are here to help. With in-depth market knowledge and a commitment to your success, we can guide you through current challenges and help you capitalize on future opportunities.
The content of this article is for informational purposes only and should not be considered as financial, legal, or professional advice. Coldwell Banker Horizon Realty makes no representations as to the accuracy, completeness, or suitability of the information provided. Readers are encouraged to consult with qualified professionals regarding their specific real estate, financial, and legal circumstances. The views expressed in this article may not necessarily reflect the views of Coldwell Banker Horizon Realty or its agents. Real estate market conditions and government policies may change, and readers should verify the latest updates with appropriate professionals.
