If you locked in a mortgage around 2021, you're about to get a reality check. The math isn't pretty, and you've probably heard the doom-and-gloom predictions about a housing bubble finally bursting. But here's the thing: the story is more complicated than that.

The Lower Mainland just wrapped up its slowest year for home sales in more than two decades. The Fraser Valley saw 12,224 sales in 2025, down 16% from 2024 and 33% below the 10-year average. Greater Vancouver followed the same pattern, with 23,800 sales compared to 43,999 in 2021.

Remember 2021? Bidding wars, subject-free offers, buyers paying premiums they could barely afford because rates were sitting below 2%. That world feels like ancient history now.

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The Payment Shock Everyone's Talking About

Here's the uncomfortable truth. Around 1.15 million Canadians are renewing mortgages in 2026, according to the Canada Mortgage and Housing Corporation. If you're one of them, your rate is probably jumping from somewhere around 1.6% to 1.9% up to between 3.9% and 4.24%.

Port Coquitlam mortgage broker Angela Calla put it plainly: "Canadians are going to be faced with payment shock." She's not wrong. Ratehub calculations show that monthly payments could increase by about 26% for fixed-rate renewals.

Let's make this concrete. Say you bought a home at the average Canadian price in late 2020 with 10% down and a 1.39% five-year fixed rate. Your monthly payment was around $2,224. When you renew now at 3.94%, that jumps to $2,800. That's an extra $576 per month, or $6,912 per year.

Variable-rate borrowers are getting off easier, with increases around 4% versus their current payments. But easier is relative when you're already stretched thin.

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So Is This When the Bubble Bursts?

Every year, someone predicts this will finally be the year. Every year, they've been wrong.

"The fundamentals just don't really line up with it," said Andrew Lis, chief economist for the Vancouver Real Estate Board. Despite slow sales and mounting inventory, prices are only down about 5%. The Fraser Valley benchmark ended 2025 at $905,900, down 6% year-over-year and 24% from the March 2022 peak.

That's a correction, not a collapse.

And here's something most people don't think about: if the bubble actually did burst and prices dropped 50%, you probably couldn't buy a home anyway because you'd have lost your job. A market crash severe enough to cause that kind of price drop would bring a recession that would destroy employment. It's not the windfall opportunity people imagine.

Tore Jacobsen, managing broker at Macdonald Realty and chair of the Fraser Valley Real Estate Board, put it this way: "We have seen over the course of 50, 60 years, as long as they've been tracking real estate, there is always ups and downs in the market, but the general appreciation has always been in a northward direction."

Look at the history. In 2009, the U.S. subprime crisis cooled our market. Within a year, record-low sales had turned into record highs by December. In 2012, sales dropped 24% in Vancouver due to tightening mortgage restrictions and economic uncertainty. The following year, prices and sales boomed again.

This is such an amazing place to live. That doesn't stop being true because of a down market.

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What You Actually Need to Do About Your Renewal

Start early. Like, months early. This isn't the time to just sign whatever your current lender sends you.

"The best rate is rarely the best mortgage because it's only part of the cost," Calla said. Penalties, portability, prepayment limits, and refinancing flexibility matter more than a fraction of a percentage point.

Shop around. Talk to a mortgage broker. They see options from multiple lenders and might find you terms that work better than whatever auto-renewal letter landed in your mailbox.

If cash flow is tight, consider consolidating high-interest debt into your mortgage when you refinance. Paying down a balance at 4% instead of 20% on a credit card is basic math. You could also extend your amortization period to ease the monthly pressure, though you'll pay more over the life of the mortgage. Sometimes that trade-off is worth it.

The Bank of Canada has indicated it expects to keep its prime rate stable at 2.25% for the foreseeable future, with most economists predicting rates will hold steady through at least 2026 and potentially into 2027. Fixed mortgage rates are currently hovering between 3.79% and 3.94%, while variable rates have dropped to around 3.45%, making them cheaper than fixed rates for the first time in three years.

That stability matters. It means you can plan.

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What About Selling in This Market?

2025 was brutal for sellers. The Fraser Valley saw 37,963 new listings in 2025, the highest level in more than 40 years. Greater Vancouver had 65,335 listings. But sales volumes were way down.

Industry experts have blamed post-COVID contraction, workers returning to offices after years of remote work, the foreign buyers' ban and tax, lingering inflation, and the psychological effects of the ongoing U.S. trade situation.

"The demand for real estate is there for buyers and sellers. It's just getting people off the sidelines," Jacobsen said.

Many sellers need to sell to buy, but they're stuck on the math. They paid X amount in 2021, and in 2025 they're getting Y. That math just doesn't work for them emotionally, even if it works financially when you factor in life changes and needs.

Lis from the Vancouver Real Estate Board was direct about what's working: "The reality is that sellers who are motivated and are pricing properties correctly for the market environment that we're in, they're seeing transactions. The properties we're seeing that are standing on the market are ones that are anchoring prices to years past."

Translation: price it right, it'll sell. Price it based on what you think it should be worth, and it'll sit.

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What's Actually Driving This Market

Multiple forces are at play, and they don't all point in the same direction.

On one hand, you have inventory levels that are elevated across the Lower Mainland. In December 2025, active listings totaled 18,254 units in Greater Vancouver and 6,965 in the Fraser Valley, both well above typical seasonal levels. The sales-to-active-listings ratio in the Fraser Valley sat at just 13% in December, right at the edge of balanced territory.

Days on market have increased too. Single-family homes in Greater Vancouver spent an average of 51 days on the market in November 2025, with townhomes at 39 days and condos at 44 days.

But there's another factor few people are talking about: the FIFA World Cup is coming this summer. Vancouver is hosting seven matches at BC Place between June and July 2026. The province expects over 350,000 international tourists during the event, with projections of more than 1 million additional out-of-province visitors between 2026 and 2031. Tourism spending is expected to jump by over $1 billion, with tourism industry output rising by $1.7 billion.

That's massive. Vancouver Mayor Ken Sim said it plainly: "If you thought Expo 86 or the 2010 Olympics were big, they pale in comparison. The whole world is going to be looking at us."

The federal ban on foreign buyers expires in 2027. While the provincial foreign buyers' tax of 20% remains, the lifting of the federal ban combined with the global spotlight from FIFA could shift international attention back to Vancouver. Jacobsen expects FIFA will do what Expo and the Olympics did: remind the world that this is one of those paradise-on-Earth places where mountains and ocean share the same photograph.

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What Economists Are Actually Saying

Aled ab Iorwerth, CMHC's deputy chief economist, expects caution to persist: "My instinct for 2026 is that everybody's going to remain very cautious. It's sort of a standard economic approach that when you see a lot of uncertainty, your first best option is to do nothing, and try and see how the uncertainty will resolve itself."

That uncertainty includes the ongoing U.S. trade situation. Current projections suggest tariffs could cause a permanent reduction of about 1.5% in Canadian GDP by the end of 2026 compared to a no-tariff scenario. Ontario and Quebec's manufacturing sectors, along with the softwood lumber industry, will bear the brunt of the friction.

But the B.C. economy remains relatively insulated. Lis expects the market to pick up in the latter part of 2026, with spring serving as the bellwether. His projections call for about 27,000 sales in Greater Vancouver, a significant uptick from 2025's 23,800 but still well below the 43,999 from 2021.

Benjamin Tal, deputy chief economist at CIBC, forecasts little change in rates: "In all likelihood, the Bank of Canada will keep rates at the current level until 2027." Bond markets and fixed mortgage rates are expected to remain relatively stable.

The big challenge for 2026 isn't rates; it's confidence. People are holding back not because they can't buy but because they're unsure what's coming next.

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The Numbers That Tell the Story

Here's how dramatically things have shifted between 2021 and 2025:

In the Fraser Valley, sales dropped from 27,692 to 12,224 while new listings climbed from 35,629 to 37,963. Detached home prices fell from $1.5 million to $1.39 million. Townhomes actually rose slightly from $765,800 to $781,300, but condos dropped from $549,200 to $491,600.

Greater Vancouver saw sales plummet from 43,999 to 23,800, while listings increased from 62,265 to 65,335. Detached home prices held relatively steady, falling just $30,400 from $1.91 million to $1.88 million. Townhomes climbed from $1 million to $1.06 million, while condos dropped from $761,800 to $710,000.

The condo market has taken the biggest hit, particularly in Surrey Central, where a flood of inventory from investors who bought pre-construction units has created what some are calling the best buyer's market in B.C. Units are selling at steep discounts, sometimes below replacement cost.

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The Bigger Picture

What we're seeing isn't a crisis, it's an adjustment. After years of prices rising faster than incomes, faster than fundamentals could support, the market is finding a more sustainable level.

Is it uncomfortable for people renewing mortgages at higher rates? Absolutely. Is it tough for sellers who bought at the peak? No question. But markets correct. They always have.

The Lower Mainland has been through downturns before. Every time, people predict the end. Every time, the fundamentals reassert themselves. This is still one of the most desirable places to live in the world, with strong job markets, incredible natural beauty, and growing immigration despite recent slowdowns.

If you're renewing your mortgage, take it seriously. Get professional advice, explore your options, and plan for higher payments. If you're selling, price realistically and understand this is a buyer's market. If you're buying, you've got more negotiating power and inventory to choose from than you've had in years.

The doom predictions will keep coming. They always do. But the bubble isn't bursting. The market is just returning to something closer to normal after years of pandemic-fueled extremes. If you're navigating a mortgage renewal or considering a move in 2026, Coldwell Banker Horizon Realty can help you understand your options and make decisions based on real data rather than fear or speculation.