What Happened

TD Economics has revised its 2026 forecast for the Metro Vancouver real estate market, predicting that condominium prices will continue to decline throughout the year. The bank's economists state that the local condo market remains under significant pressure due to a combination of weak buyer demand and elevated new inventory levels. Specifically, TD projects that condo prices will fall by approximately three percent, bringing the average price down to roughly $712,853. This downward trajectory is part of a broader national trend where Canadian housing has experienced one of the deepest corrections among advanced economies. Nationally, home prices have plummeted 18 percent from their peak in the first quarter of 2022 to the third quarter of 2025. The national composite price was down four percent in December 2025 compared to the previous year, while annual sales fell nearly two percent. TD Economics forecasts a roughly 15-percent peak-to-trough decline from the 2023 high by mid-2027, marking the deepest correction on record back to 2005. Karl Schamotta of Corpay Currency Research highlighted that Canada is still in the grip of a severe housing downturn. Rishi Sondhi at TD Economics noted that the market has been subdued since last August, with little sign of stabilization. Several factors contributing to this stagnation include economic worries, high cost-of-living pressures, and weak population growth. The sluggish economy and subdued housing activity suggest that another sub-par year for the Canadian housing market is likely in 2026.

Why It Matters

The continued decline in Metro Vancouver condo prices signals that the market has not yet found its bottom, impacting both current owners and prospective buyers. For homeowners, the persistent price drop erodes equity and complicates refinancing or downsizing strategies. For buyers, the elevated supply and weak demand create a buyer's market, but the lack of stabilization means timing the entry remains difficult. The broader national context of an 18 percent price drop from the peak underscores the severity of the correction, which is driven by the aftermath of the Bank of Canada's rate-hiking campaign. Rates rose to five percent from 0.25 percent, significantly increasing borrowing costs and dampening affordability. This environment affects market confidence and liquidity, making it a critical period for real estate decisions in the region.

Local Vancouver / Burnaby Context

In Metro Vancouver, the condo market is specifically identified by TD economists as 'still searching for a floor.' This local dynamic is influenced by the broader national economic headwinds, including weak population growth and a sluggish economy. While national data shows a 19 percent drop in prices since the peak, the local condo segment faces unique pressures from new supply. The region's housing market has been affected by the same economic and cost-of-living worries that are impacting the country. The quiet closure of the 2025 housing market, with sales falling nearly two percent, reflects the cautious sentiment among local participants. The lack of stabilization in prices suggests that the adjustment process is ongoing, with no immediate catalyst for a rebound. Local buyers and sellers are navigating a market where inventory levels are high, further suppressing price growth. The impact of the rate-hiking campaign, which began in the first quarter of 2022, continues to weigh on affordability and demand in the Greater Vancouver area.

Market Impact

The predicted three percent drop in condo prices will likely continue to suppress transaction volumes as sellers wait for better prices and buyers remain cautious. Elevated inventory levels will keep competitive pressure on sellers, potentially leading to longer days on market. For the broader market, the 15 percent peak-to-trough decline forecast by mid-2027 indicates a prolonged period of price adjustment. This environment may benefit cash buyers or those with significant equity, while those relying on financing may face stricter lending criteria. The sluggish economy and weak population growth will continue to limit demand, preventing a quick recovery. Market liquidity may remain low as participants wait for clearer signals of stabilization.

Investor / Buyer Takeaway

- Buyers should expect continued price softness in the condo market through 2026, with average prices potentially reaching $712,853.

- Investors should be cautious of elevated supply and weak demand, which may limit rental yield growth and capital appreciation.

- Sellers may need to adjust price expectations significantly, as the market has not yet found a bottom.

- Monitor population growth and economic indicators, as weak trends in these areas are key drivers of the current downturn.

- Consider the long-term 15 percent peak-to-trough decline forecast, which suggests the correction is not yet over.

Builder / Developer Perspective

Builders and developers in Metro Vancouver face a challenging environment with elevated supply and weak demand. The predicted price drop may impact pre-sale viability and financing terms, as lenders assess risk in a declining market. High inventory levels suggest that new projects may face competition from existing stock, potentially leading to price concessions. The sluggish economy and cost-of-living pressures may reduce buyer confidence, making it harder to secure sales. Developers may need to adjust project timelines or pricing strategies to navigate the prolonged downturn. The lack of stabilization in prices adds uncertainty to development feasibility and future project planning.

Risk Factors

- Continued price declines beyond the three percent forecast if economic conditions worsen.

- Elevated inventory levels suppressing prices and extending time on market.

- Weak population growth limiting demand and exacerbating supply gluts.

- High borrowing costs from the rate-hiking campaign impacting affordability.

- Sluggish economy and cost-of-living pressures reducing buyer confidence.

BurnabyHouse Insight

TD Economics' outlook for Metro Vancouver highlights a market in prolonged adjustment, with condo prices still searching for a floor. The three percent drop forecast for 2026 is not just a number but a reflection of deeper structural issues: weak population growth, a sluggish economy, and the lingering effects of the rate-hiking campaign. For local readers, this means the buyer's market may persist, but timing the bottom remains elusive. The 15 percent peak-to-trough decline by mid-2027 suggests a long road to stabilization. Investors should focus on cash flow and long-term value, while buyers should prioritize affordability and flexibility. The quiet closure of 2025 and the subdued market since last August indicate that patience is key in this environment.