Market Update: BoC Holds Rates but Real Estate is Still Stuck

Jamie:
Welcome to 2026. This is exciting. Nice to be behind the mic again, Denny.

Denny:
It is. I feel like 2025 ended very pessimistically and we both have smiles on our faces. We both are busier than we thought we would be in January 2026 and things are feeling a little more optimistic.

I don’t know. I mean, all in all, we’re coming off a historically slow year. Our business has done, I’d say, better last year than it did before. So we have some good news on our little mini front, but overall, we have no idea.

Like, what do you think at the end of the year? Price is more likely to be 5% higher or 5% lower?

Jamie:
I think my honest opinion is we’re going to see increase in sales volume. If you look at 2025, it was the lowest number of sales in greater Vancouver since the year 2000. The lowest number of sales in 25 years. It is hard to believe that that trend continues.

So I think sales volume goes up, but I think the benchmark house price in greater Vancouver is roughly the same within 2% either way. That’s my guess. Rents have been on a decline for 15 months in a row.

Denny:
I feel like that kind of reflects sales activity in the market in a way too. I remember fall of 2024 feeling like a bottom, feeling like it was slow and had to get better and then really it’s been month over month slower since that with maybe a few shining moments in early last year, but yeah, it’s significantly decreased.

I mean, sales are down. We’re coming off the holidays, November, December in a like last year 2025 being statistically the slowest year in 20 or 25 years. And coming off November and December, the slowest part of that year, I think the only reason we’re optimistic is because our phone’s been ringing more since January hit and we’re seeing more life and activity.

So there is a surge in activity in some price points and Danny, you’ve even run into multiple offer situations a number of times this month.

Jamie:
Five times. Yeah. Five times. But that doesn’t necessarily mean the whole macro market is trending upward. No. I think there’s still a lot of uncertainty out there.

I’m excited to see what spring brings with these rates. If no more major headlines show up between now and then, which is unlikely, we could have a more active normal feeling spring. And I say more active because last year was dead slow and I get the sense that a lot of people want to move.

So even if economic reasons aren’t improving, I think there’s just a lot of pent up demand for people that need more space or need to move for different reasons life, not strictly worrying about investment. So I think this is going to be year where more sellers come down to reality and more buyers buy because people want to move.

Denny:
Yeah, we’ve been saying that for a couple years. At some point, we’re gonna be right. Well, but like the sentiment we’ve been saying is at some point in the future, people are going to forget or overlook all these crazy political things that are happening currently. And there are a lot of them. And we’ll touch on a few of them today.

They’re going to overlook these things and just think, okay, well, at some point I have to make a move. Maybe this is the year. And it just seems like more people are getting over the hump now. The last couple years there’s just been so much uncertainty that it’s been people have been very cautious with making big life decisions.

And I feel like if the amount of phone calls and meetings and buyers coming through open houses in these last couple weeks is a sign of things to come this spring, it just feels like it’s a little bit more busy than it was the last couple seasons, last couple years.

You can’t really make any strong predictions, but I’d like to think we’ll start seeing some months where we get back to the 10-year average in transactions. Prices, I don’t see prices trending upward anytime soon.

I could see some of the more balanced markets that we’re seeing today, obviously, you said you run into five multiple offer situations this month. Some of the products that are a little more balanced at this time, this slow off winter season of the year might see a little bump up in prices in spring as there’s more buyers and more chance of multiple offers.

But there’s a lot of products that aren’t seeing those bumps right now. So we’ll get into it, but there are some categories and some areas in the city that are balanced markets. It’s not all a strong buyers market everywhere. No. There’s a lot of mini markets in this market.

Jamie:
Let’s maybe start with interest rates. And I don’t know if you’re as sick as talking about interest rates as I am, but I feel like we’re obligated to at least mention it.

So, last bank account meeting was yesterday. Today’s Thursday, January 29th. So, yesterday the 28th was a Bank Canada meeting. To no one’s surprise, there was no rate cut, which keeps the overnight rate at 2.25%. Which means your bank’s prime rate is likely, most banks are 4.45.

Typical variable rates work off that prime rate. So your variables today, your discounts are in the range of about a half percent 5.6. So you’re just under 4%. And 5-year fixed rates are in and around that range too in the like the 3.9 to 4.2 range. I had a client get offered a 3.89 on a three-year fixed recently.

Denny:
Okay, that’s pretty good. So that gives you I mean that’s pretty good. But yeah, high threes. I think that’s low fours. I think that’s my hope is that that doesn’t change too much going into the spring.

Jamie:
One thing to mention on interest rates is 2026 is the year of a lot of renewals. So, it’ll be interesting to see what inventory levels look like in over the next 6 months just because a lot of consumers refinanced in 2021 when rates were at all-time lows and people were getting 5-year fixed in like the 2% range.

So, it’ll be interesting to see how that plays into it. That renewal number is not as significant and overwhelming as it was or as it was looking 18 months ago. A lot of people were thinking they were going to go from 1.9 to 5.5 and that now that number like Jamie just mentioned was, you know, 3.89 to 4.1, 4.2 kind of range.

The renewals will probably cause some more forced sales, more hardship. I’ve heard numbers like foreclosures are doubled what they were before, but let’s be honest, it’s still a very, very small percentage. Like, there aren’t many out there. I ran into one kind of forced sale on Burke Mountain recently, but other than that, there will be more.

We will see because we haven’t seen many in the past few years when there’s a lot of equity gain. There’s not enough reason for sales. But I think that’s going to be more of a trend this year.

But it doesn’t to me doesn’t mean necessary blood bath unless you’re talking about those kind of speculative investor pre-sale condo high $1,300 foot, you know, condos in towers. Those ones will be interesting and there might be, you know, they might have to come off their price considerably because they’re priced quite higher than what the resale market’s doing.

But in terms of single family homes, town homes, more typical products that families want or first-time buyers want, there might be some more forced sales this year, but it’s not going to be abundant. Like it’ll be a small percentage.

Denny:
This is so hard to predict because there’s so many outside factors that are going into where interest rates are going to go in the next 12 months. But if you were to guess in 12 months time from now, will interest rates be up, down, or the same as they are today?

Jamie:
Well, the experts are saying it’s going to be flat this year. I think what I’m most curious about is let’s just like I’m not going to guess. I’m going to just say flat. I think it’s going to be flat at the end of this year and I have no strong opinion on that.

But what I’m most curious about is where I think interest rates are going to be going by summertime. Like are we going to be thinking, okay, rates are flat come a you know, if we’re having this conversation in August or September, are we going to be hearing news that rates are expected to go up? Are we going to be hearing news that rates are expected to go down?

I mean, it’s more right now the economists, the experts are saying expect no rate cuts in the foreseeable future. And if anything, they’re pricing in rate cuts from 2027 or that’s when they might get the next one. But so much can change in this world that I think it’s just easier for my mind to be at ease just to assume flat.

But I’m going to be curious to know what sentiment is going on in the rate world and market world come summer or come fall. I mean I don’t my crystal ball is not working lately. I don’t know where it’s going.

But I do feel that you know $500,000 to $700,000 condos this spring, that crystal ball I think is going to be very strong. So that and then you know the single family home around that you know that turnkey move-in quiet street home that everyone’s looking for as they get to their first house outside of a townhouse. I think those are going to be very desirable too.

But there’s a lot of products that people bought that had no intent on moving into like Brentwood Metro Town highrises, a lot of investors buying those. I think there’s going to be years of hardship there.

But, what do you, you know, Denny, what do you think? You think rates are going to be higher by the end of the year?

Denny:
No, I’d say I’m guessing flat. I’m coming at it from a perspective of like having multiple variable rate mortgages. Just like what is the right play as an investor with a couple mortgages of like do you use this flat period to try to lock in a rate so that at least the next 3 to 5 years is consistent or do you just play this roller coaster game of how the economy is going to do over the next 5 years?

Do you do a three or 3.89? I mean that’s pretty attractive actually because I don’t see variable rates going much lower than that if at all.

Jamie:
Right. Yeah, like I don’t think there’s going to be another three rate cuts, which puts you now into the low threes. So that 3.89 is not very good anymore.

But what’s been another headline of the year? I mean, we have a lot of political stuff going on. But before we jump in that, let’s talk about rental rates because rents have been coming off. That’s been a bit of news talk.

I looked at rentals.ca and just some headlines that I saw before coming into here. And you know, in I think in Vancouver year-over-year, rents are down 7 to 12%. North Vancouver is the highest major market rental city in Canada. One-bedroom in North Vancouver currently $2,469 a month, $2,469 a month for one-bedroom and $3,286 for a two-bedroom.

These are the highest rates in Canada, but even these are off well, you know, year-over-year. And then Vancouver was the second highest on on this site. And the rents for these markets peaked around summer of 2023.

So like you know one example I can think of like in New West there’s these three buildings on Carnarvon Street that are over the newest Sky Train station that have a lot of rentals in them and in the peak of 2023 I think a one-bedroom there was getting around 2,300 and then today I saw one listed on rentals.ca for 2,000. So maybe it’s 2,000, maybe it’s 1,900, maybe 1950, maybe $2,100 if it’s nice, but it’s off $300 in that case in the last three years.

Denny:
So rents are down. I think 7.5% year-over-year is seems like a realistic number. And I think it’s a little bit more of that, more than 7 to 12% from peak to now, maybe 10 to 15.

But I also like we’re not heavily involved in rents and I think rents in some areas might have more room to go down. I think the one thing that stood out is the what was it the title they gave it, annual change for purpose-built rentals.

So there was a stat around purpose-built rentals and what is the second slowest growing market in Canada measured by purpose-built rental rates. So basically a city and this is strictly purpose-built rental rates. So, what city in Canada is the second slowest in terms of rental rates going down basically or not going up the least? You want me to guess?

Jamie:
Yeah.

Denny:
Vancouver.

Jamie:
New Westminster.

Denny:
Interesting. So, and I think it makes sense. It’s and I think it’s a bit of a skewed sample, but if you think of New Westminster, they’ve recently completed some pretty high-end towers that are rental focused and downtown New West and in the Brewery District in Sapperton.

Those rents are high. They have to be high. They’re concrete highrises. I think their one-bedrooms were mid twos and their two bedrooms were low threes and kind of flooded the market with high-end rental product similar to Pier West with resell and the waterfront. And I don’t think they’re getting those rents.

So, in New Westminster for purpose-built rentals, it’s down 15.4% year-over-year. And I think it’s also it’s clearly because the rents that those few towers that flooded the market were significantly high when they first closed.

Jamie:
Yeah. And they couldn’t get them, so they had to come off. So not part of the reason for I mean there’s a lot of reasons, but part of the reason for the sales volume being so much lower last year is just the investor market has disappeared. Completely disappeared.

I actually had someone walk through a condo a couple days ago and say they were looking for an investment property. And I was like, really? The first one I’ve heard say that in 2 and 1/2 years. But that speculation in greater Vancouver is gone.

The days of like the average, you know, hard working couple looking for a second property to rent out to pay down the mortgage to maybe gift to their kids one day. That has disappeared.

And so I think those rental rates of like those like one and two-bedroom condos that are just generic, I think they do have room to come down still. But I think that with uncertain with so much uncertainty in the political landscape with lending costs being higher than they were a few years ago, with costs of single family and town homes and family style living situations still very expensive.

I think those like three-bedroom town home or condo rentals are still in fairly high demand just because there aren’t very many of them. But that typical one-bedroom shoe box condo that’s 550 ft. I think those are going to be tough for the next five years to rent or buy.

Denny:
To rent out. Yeah. Well, there just not going to be that many people looking for them. I think it’s price sensitive. You know, I think one thing about rental market is it’s very, you know, if you say 2,000 might be the difference between 2,000 a month and 1,800 a month.

The return on the number of inquiries you get might be significant difference. But with those rates going down, that’s what I’m saying is just like that investor who is looking to rent something out, seeing declining rents and potential room for them to go down, like that one-bedroom condo to buy to rent out is not appealing. No more.

Jamie:
Well, I mean, the catch is do you I mean, whether you’re buying to rent it out or whether you’re holding a property that you don’t want to hold, do you take the hit today or do you rent it out and lose a couple hundred a month ongoingly without foreseeable uplift in the near future? And there’s an argument for both.

I mean, the positive taking the hit today is you get mental clarity today. You can move on today. You can put in other investment opportunities and hopefully make up for it. If you ride it out, that’s been the Canadian way is just hold real estate until it keeps going up.

But it just may not be an exciting time to be a landlord for now. I always felt like I mean, this is obvious. It’s not rocket science. It’s fun being a landlord when prices are going up, but if you have if you’re a landlord for a flat decade, you’re probably gonna change your business model after that.

Denny:
100%. Yep. On the sales note, I just want to note to like put it into perspective that 2025 was a much slower year. So, in Greater Vancouver overall, there was 23,696 sales in 2025. In 2024, there was 26,364 sales. So, that’s down about 10% from 2024.

Comparatively to 2021, which was the crazy busy year, 44,058 sales. So, 2025 sales volume-wise was down 46.3% comparatively to 2021.

Jamie:
Yeah. That sums it up. That’s a little different volume.

Denny:
Yeah, you know, I got a little micro example because I was looking at certain properties and you know, I mentioned these towers in New Westminster, the Carnarvon, Azure, Plaza 88 on Carnarvon Street. There was a recent two-bedroom, two bathroom sale there that sold for $540,000.

So, two bed, two bath, $540,000. That’s a pretty good appealing price for a concrete high-rise. Do you have a peak price for that?

Jamie:
I do. I do. But this is a 779 ft unit. So it’s $693 a foot. High sixes around that $700 mark a foot for in this case it’s call it a 15-ish year old building. Don’t hold me to that.

That’s probably been the most active price point in New Westminster and every city has a different product mix. But New West, just you know, when you think of the buildings, a lot of them are early 2000s or early 2010s and those are the ones that are moving most and they’re moving for give or take 50 to 100 bucks a foot in that $700 foot range. Which you can’t build new condos for even close to.

So that’s there’s a value play there. It makes sense that that would be where it would land. But this unit, two bed, two bath, sold for $540,000. It’s basically the same price as it sold for 8 years ago.

So I looked at the same floor plans and the history in the complex in 2017, 2018 and it was I mean there’s a difference from the start of 2017 to the end of 2018. It’s basically at 8 years ago prices and in 2025 there’s three towers in these buildings and a lot of these towers cater towards investors historically so investors bought them in pre-sales and even in the resale market investors were buying them to rent them out because the rents were good. They’re connected the sky train and people would buy as investments.

Last year there was 28 sales in these three towers. To compare that to 2018, 6 years ago there was 58 sales there. So it’s basically less than half and in 2021 there was 67 sales. So we’re you know give or take 40% of the peak activity in the market and this is like an investor sort of oriented complex but there are a lot of end users in there too and I think at these prices it’s probably attracting some first-time buyers.

So to I guess to kind of put that and like so what was 540 today? Let’s just call it it’s come off maybe in the neighborhood of 15% is the most extreme example like probably from the 2022 prices.

But same prices from 8 years ago today in these towers and like a house in Glenbrook North that you know that box built in the 1940s or ’50s or ’60s that doesn’t add a lot of value it’s gone up maybe 10 to 15% during that same time.

So there’s and if you go to an example where you get a that same era house that Glenbrook north house that’s gone up 150k call it in the last 8 years, that same house in Dunbar has gone down in the neighborhood of 20% during that time. So in the same city you got some areas going up some areas flat and some areas going down.

Jamie:
It’s a good topic and one that I wanted to mention. Thanks for bringing that up. But just the cost to own today versus even last 2 years ago, like January 2024, has gone down pretty significantly.

So, I actually stole this from another realtor. I saw a post on social media the other day, but January 2024, your typical 5-year fixed rate was 5%. The benchmark price at that time in January 2024 was $1.16 million in Greater Vancouver.

So, prices have come down slightly in the last two years. We saw the big drop kind of between 2022 and 2024, but even over the last couple years, the benchmark price in January 2026 or last month basically was $1.14 million. So down about 50k.

But the big thing is the mortgage rate now if you’re in and around that 4%. Sorry, you said 1.16. $1.16 million benchmark price in January 2024 compared to $1.14 million this year. But your mortgage is down a percentish. At least 1%.

And that brings your average mortgage payment if you’re buying something that is exactly that benchmark price down from $4,957 to $4,238, which is 14.5% more affordable monthly. So that’s a big thing right there.

And then you mentioned a couple specific examples. I’ll share a couple too. You mentioned I’ve been in multiple offers, a bunch this last couple weeks.

Denny:
Yeah, do tell, Jamie. Do tell.

Jamie:
So, I’ll share a couple examples. So, one was an East Van half duplex that was about 15 years old. It had a really good floor plan, and not all East Vancouver half duplexes are getting multiple offers right now. This one was on a really nice, quiet street, good neighborhood, and had a really good floor plan. It sold for $1.429 million.

And that exact I mean, like a very, very similar one in 2022 at peak pricing sold for about $1.55 million. That’s down $130,000 in the last few years. So even though you’re potentially competing for some of these more desirable neighborhoods and products, the price point is still down pretty significantly even in that we always talk about East Vancouver as being recession proof and bulletproof because it’s such a desirable area and even in neighborhoods like that you’re seeing $130k off peak pricing.

This one is really interesting actually. An older entry-level home in New West. This had been on market for 4 months and it was in a good neighborhood in Moody Park. Close to all the schools on a quiet street. It was a little bit of a smaller lot which I think held it back a bit, but that got multiple offers in January after being on market for four months in the fall. And has an accepted offer now, but my guess is it’s around $1.2 million.

In 2022, a really, really similar home two blocks away listed at $1.399 million. Any guesses what it sold for? Oh, it’s a 33×32 lot listed at $1.399 million in 2022.

Denny:
Well, you got my expectations high, Jamie, so I’m going to just say it went for $1.6, $1.7.

Jamie:
Oh, so that exact like it’s actually comical how comparable these two homes were and single family is a little more difficult to measure apples to apples versus like condos or duplexes are a little more similar, but this one was pretty similar in terms of lot size. Was two blocks away on a quiet street. Very similar aged home with some mechanical updates like the one that is going to sell around $1.2 million sold for $1.608 million. Jeez, that’s almost down 400k.

Denny:
That’s a big hit.

Jamie:
Yeah, you can find these extreme examples. I got another one. Heritage Woods 3-bedroom townhouse. This is Port Moody up the mountain. This is about a 22-year-old townhouse. There was an 1,800 sq ft corner unit that sold last week for $1.14 million. 1,800 ft². That’s pretty good value.

In 2022 one in the exact same complex corner unit basically identical unit on the next block of town houses sold for $1.42 million. Wow.

And in this environment of multiple offers today. I mean we’re Yes, I’ve been involved in five and I think that’s fairly unique in the last couple weeks. It’s not like this is a 1% of listings maybe maybe two or 3% of listings are getting multiple offers. But the environment in that scenario is like completely different than it was in 2022.

In 2022, this Heritage Woods Town Home listed at $1.299 million. I don’t know how many offers, but let’s say somewhere between five and 10 offers likely, and sold for $1.42 million, sold $120k over asking, likely subject free versus this one today, got two offers, sold under asking at $1.14 million.

Denny:
I think it might be worth mentioning that there’s some town home like town homes in 2022, particularly Port Moody, were an extremely hot product.

Jamie:
Totally. And I think it would be worth mentioning that like some of them got caught up in multiple offers on the craziest of months and that $1.42 million was probably the lucky outlier sale and probably a few months before and maybe a few months after it probably was trading more around $1.3 million.

So $1.3 million normalized to $1.14 million still a sizable adjustment for a family townhouse that is one of the probably the stronger product types in the city right now.

Denny:
Totally. Want another townhouse example?

Jamie:
I do.

Denny:
Another complex when young couples and young families are moving out to the suburbs to consider is in PoCo, Fremont Village. And you’re very familiar with that recently. Ranger Lane is the name of the street. We often recommend clients look there.

They have a great amenity center. They have a ton of new commercial spaces within walking distance that is shopping and restaurants and breweries and a ton of stuff. An underutilized basketball court that is perfect if you have kids. It’s awesome. Makes it almost worth leaving a house for. There you go. It’s great.

That complex is built between 2015 and 2018-19 I believe. Last week two weeks ago, there was a sale in there. A very typical inside unit 1350 ft² 3-bed, two bath sold for $875,000. At the peak 2022 there was an identical sale for $1.1 million. So that is down 20%.

And I had an instance where basically one of the higher-end units was call it around $1.2 million today and then the peak they were I think $1.36, $1.38 million. That’s an end unit, four-bedroom in the complex.

Inside units, it’s a market where if you have all the desirable features, you’re getting more attention, but if you’re call it a commodity or nothing special, you kind of have to the only way you can stand out is on price.

Jamie:
Totally. And there’s one more I want to share because I think even though yes, the sentiment over the last 24 months has been really negative and pessimistic, there is a lot of opportunity for that young family who’s been thinking of getting out of strata for the last few years.

Maybe they had their second or third kid and they just are feeling tight in their townhouse or condo. Single family home. West Coquitlam, Harbor Chines. Really, really desirable neighborhood, really nice, quiet streets, you get bigger lots, walkable to schools and parks, and you’re it’s a pretty cool setting in that neighborhood.

In December, there was a sale on a quiet street, 1960s home, nothing special, 70×130 lot, so pretty good lot size, dated home sold for $1.53 million and in 2022 a pretty similar home 1950s dated similar size lot it was actually a smaller lot sold for $1.84 million. So that’s down $310k, which works out to about 17%. For single family in a really desirable neighborhood in West Coquitlam.

Denny:
Yeah. Better deal for land than it was before. 100%. Also helps that the whole city’s been upzoned on density, too. So you can do more with it now, too.

I got another one here, Jamie. I shared the kind of those towers above New West Station that were more heavily focused. Well, they’re first-time buyer products, but also a lot more investor products.

There was another tower in downtown New Westminster that is not an investor oriented tower. It’s more end users that would want to buy there. And there was a recent sale for a two-bedroom, two bath, 910 ft unit that sold for $620,000.

And this is a good example of what a typical two-bedroom that’s call it 15 years old goes for in New West in a desirable building. This particular unit sold for $620,000 today. The seller bought it for $579,000 9 years ago. So in 9 years it’s gone up 7%. $579,000 to $620,000.

And during that time you know you’re talking about land examples like aside we’re talking we use 7% in terms of CAD Canadian funds but during that time like construction materials have gone up probably across the board on average around 50%. Groceries have doubled, milk’s twice as much as it used to be or twice as much as it was 9 years ago or 8 years ago.

So, as our real estate prices have been flat, in this case, upwards of 7% CAD, everything else is getting more expensive. And I guess I highlight that because affordability is painful.

I mean, this is how real estate we’re in an experience where real estate is getting more affordable. The numbers are still high in Canadian funds, but when you compare them to what we’re spending on other goods, I mean, it’s not just in some extreme examples 15 to 20% off. It’s 15 to 20% off in Canadian funds, but if you did something else with that money or if you look at what you’re spending that money on in terms of groceries, it’s significantly lower.

Not the same sort of investment return that our parents and their parents had on Canadian real estate.

Jamie:
And then I’m going to just to talk about kind of a like I guess a kind of a value play. You touched on an example of Heritage Woods, that was the 1800 square foot townhouse. I just looking at the last 30 days of sales trying to find some kind of standout storytellers.

There was a couple sales on Westwood Plateau. If you’re curious where you want to get the most bang for your buck, you can get some 4,000 sq ft ’90s built homes on Westwood Plateau for around $1.5 million. That’s freehold. Well below replacement value.

There was two sales in that neighborhood for 4,000 sq ft homes up there. I’m going to guess those peaked at like $2 to $2.1 million and now they’re $1.5, $1.6 million probably.

Denny:
I mean, Port Moody went bananas, but I don’t know how much Westwood Plateau benefited from that in 2022, but if it wasn’t $2.1, $2.2 million, it might have been $1.9 or $2 million. It was close.

And then I touched on this briefly, but there’s because I know, not that we do a lot of business out there, but I know that it’s a great example for where not to get a good real estate return in the last 10 years, but doesn’t mean the next 10 years won’t be different. It might be a complete opposite. I actually think it will probably have a better return in the next 10.

But Dunbar, I saw two 1940s bungalow style homes on 6,000ish square foot lots sell for $2.5 million in the last call a month ago. And similar homes in 2017 within a block from this 9 years ago. So $2.5 million sales examples recently. Can I guess?

Jamie:
Yeah, go for it. 2017 $3.3 million.

Denny:
That was the one of them was $3.3 million. So, one of them was $3.3 million, the other one was like $3.1 or just under $3.1 million. But there’s two sales, similar lot sizes, comparable neighborhood. Today $2.5 million, 9 years ago, $3 million and $3.1 and $3.3 million. 9 years ago. 9 years ago. That was 2016. No, well, 2026 now. So, those are 2017.

That was the boom for single family. That’s when like it was absolutely bananas. It was almost more chaotic in 2016 and 17 in the multiple offer environment because it was new. Like realtors hadn’t really seen it before. Consumers hadn’t seen it before versus 2021 it was like round two of it and so it was a little more polished and put together and it was like less wild west and more professional.

2016 2017 had some areas that went bananas. Richmond, Vancouver West, Burnaby in some pockets. And then the trickle down effect to those other areas where the Richmond sellers and West Vancouver West sellers and Burnaby sellers would go to, they had a little bit of a later run.

Like I remember there was a moment and I if you go back on our podcast I probably said this like half a dozen times but there was a moment where like an upper deer lake midcentury 1950s bungalow I remember it sold for $1.98 million when the same house in Glenbrook North 5 minutes down Canada Way sold for I think it was like $1.2 million and it was like a $700,000 spread for driving 5 minutes 8 minutes down Canada Way.

That spread has narrowed like today that $1.98 million particular example was a house that tripled in a short period of time because it sold for like $680,000 not long before that like a decade before. But that $1.98 million home is probably today around $1.5, $1.6 million.

And that Glenbrook North home that was $1.28 million at that time is probably around maybe $100,000 higher. So let’s call it a $700,000 spread has gone down to $150 to $200,000.

Jamie:
Different times. That’s what happens when you take away foreign buyers in certain markets.

I want to talk about a little hot spot that I’ve kind of experienced that was kind of against the grain. And you know, new construction, you hear bloodbath, nothing selling. And I think that is true for what our speculator past has been. When we buy the concrete high-rise, the developers incentivized to more density, more units, and they make smaller units, and those are the ones that are struggling the most.

However, on the opposite end of the spectrum, there’s parts of this city that are doing town houses, woodframe, that are not in the same environment. I mean, I think they’re actually selling at profitable numbers. It’s just that profit has shrunk considerably. And where I’m going with this is Burke Mountain.

So Burke Mountain is a fully new community loaded with town home communities. And if you look back at the sales in the last 30, 60, 90 days, whether it’s Coquitlam or just the Lower Mainland as a whole, and look at what’s been selling that’s less than a year old, like brand new. And Burke Mountain is one of the hot spots where it’s had some of the most transactions.

And there’s three developments that I’ve seen with buyers in the last month that have actually been selling. And some of them like we’re talking about half a dozen units kind of over the holidays selling and they’ve all discounted their prices and offered a little incentive but not significantly. It might be equivalent to GST or it might be a GST like let’s call it give or take in the neighborhood of a 10% discount from yesterday’s prices.

But one development is called Versant. They’ve done a real strategic job of pricing their units under thresholds that give people GST free. So, an example of that is they have these 1,800 sq ft 4-bedroom town homes that are priced at $1.099 million. And if you’re buying new construction, I think in 1,800 for $1.099 million.

And coincidentally, the property transfer tax exemption on new construction is at $1.1 million. So, they’ve coincidentally I yeah, I don’t know if they’re aware of this. Obviously, they are. But they priced their place at a price where the buyer for that doesn’t pay property transfer tax.

And so, there is a savings there compared to, you know, they’re still on the hook for GST, but they’re getting the property transfer tax off. Good value. And they’ve been selling. You can look it up. They’re probably I don’t know how many units, but let’s just call it a dozen units.

The two of these developments are polygon developments. One’s Parton and Creek, the other one’s Ridgewood. They’ve been selling as well. They’ve all I’m sure they’ve discounted their prices as well, but the values aren’t that much of a premium on top of resale values.

The Versant one that I’m mentioning here, they had units priced at $1.099 million, those were almost in line, like basically around the same prices of existing units that are 5 years old. So the premium for new construction, at least in Burke Mountain those developers in those communities can afford to compete with resale market.

Whereas like the tower in Metrotown and Brentwood can’t even come close. So I actually could see a world where majority of construction starts in the next few years are more townhouse products. I don’t even think lowrises can make the numbers that these town homes can. That might be where the majority of our house starts come in the next little while.

Denny:
It’s such an interesting point and we’ve talked like so many times on this podcast about the premium for new construction especially in those like really dense areas like Brentwood and Metrotown and in the craziest of markets that premium for new construction was 20 to 25%.

We talked about this scenario in Brentwood a few times, but that amazing Brentwood Tower, I want to say tower 5 that launched in like 2021 or 2022 and they were selling around $1,400 a foot when you look at resale and they were $1,050 a foot and they were just playing the speculation game of in 5 years when this tower is built, the market’s going to be significantly better than it is today. And unfortunately, that doesn’t look like it’s going to play out. No.

And now here’s some examples of new construction being in basically in line with resale. I’ll also add the development Versant they had these other smaller three-bedroom town houses that were priced at $849,000. And they were selling too. And those are 1,263 ft. So those are pretty good prices for brand new construction.

And like that’s at a cutoff where you’re you’re basically you’re not paying property transfer tax. If on new construction, it’s in the price point where you don’t pay property transfer tax. And first-time buyers, if a first-time buyer’s buying that, there’s no GST.

So, first-time buyer buying the smaller three-bedroom in that development, no GST, no property transfer tax, better than resale in terms of those costs. That’s the thing is like when you look at other developments in that neighborhood, you’re looking at like Orffel or like there’s a number of 15-year-old town homes and that’s what the 15-year-old town homes are selling for $850,000 to $900,000 that are similar size, 1300 ft², whatever they are.

So, you’re getting brand new with the PTT, property transfer tax exemption, and if you’re a first-time buyer, the GST exemption at or below in that case below a resale value. So, those are my stories from Burke Mountain and new construction.

Jamie, I don’t know if you’ve seen anything like that, but I think and the only other thing I’ll mention is there was a little uptick in some transactions for condos in Coquitlam West, but not nearly the same number as townhouses. So there has been some sales for new construction and developers have been making better deals too. I’ve been in a few developments in Port Moody where prices have come down and they’re like they’re reasonable, not astronomical.

Jamie:
I mean like you can just tell by how many marketing emails and phone calls we get from new construction that a lot of them throughout the city are struggling to put deals together. I don’t know about you, but like I’d say I get at least five a day. And it sounds exaggerated, but it’s not. It’s like all the time. And I think that a lot of them are feeling desperate.

And the last handful of new construction deals that I’ve done is there’s a lot of behind the scenes negotiating power with a buyer right now. And in new construction, you need to be a little bit creative of how you negotiate with the developer because they want to post a full price sale.

But there are ways in contracts to get significant discounts through like decorating allowances. And I even had one that was I think like 90 grand like a couple months ago. And so you’re getting basically $100,000 off the price even though you’re posting a full sale price.

And when you’re adding into that no PTT and no GST potentially and those lower price points, those are pretty good deals that don’t come around too often in new construction. Like when was the last time new construction was this easy? or not say easy, but like this affordable or this close to resale or at resale prices. Was that 2014?

Denny:
Oh, I feel like it was when whenever Elliot Street was developed. That was what when what year was that? 2012. Yeah, they had incentives and that was kind of the last one that I felt that sold at unfortunate prices for the developer because they were pretty good. Like it jumped up significantly after that one whenever that was built.

Jamie:
Interesting. I’m excited to see what’s ahead. Denny, do you have any other comments on where the market’s at or you know, I guess to time stamp this, we just had our rate announcement yesterday. It’s January 29th when we’re doing this episode. The US Fed didn’t lower cut their rate either. And at this moment in time, our Canadian dollar bumped up a little bit.

Denny:
So, I think that’s some positive news. Yeah, well maybe not for exporters per se, but our dollar went from 72 to 74 in terms of compared to the USD.

For people thinking of making a move this year, I just want to end on a little bit of an optimistic note. So we talked about affordability down because of interest rates. Prices have come down slightly in the last couple years, but interest rates have come down too. And the benchmark price example that I gave you was 14.6% more affordable monthly.

We talked about single family and some three-bedroom townhouse examples that are down in the neighborhood of like 17 to 20%. Versus look at your one and two-bedroom condo. So Jamie gave a couple examples.

I had another one in Victoria Hill, newer building, 2019 building. The most recent sale was $655,000 for a two-bedroom 900 sq ft unit. That’s down from the peak of $730,000. So that condo specifically in Victoria Hills is down 11% versus what you’re upsizing to potentially single family in West Coquitlam. That example down like 17%. So that gap between what you’re upsizing to if you’re thinking of making a move this year has narrowed quite a bit.

And with affordability, with interest rates coming down a little bit over the last couple years, I just think like that’s the opportunity this year is those young families and young couples that are thinking about more space and want to get into a piece of land. Those single family homes have come down significantly. That West Coquitlam example was down $300k versus your condo if you’re in that newest Victoria Hill condo has come down $70k.

I think just highlighting the closing comments of this is where are the opportunities and I think you’ve nailed a few. I guess just to be more specific, first-time buyers, lower price points. If you’re looking at a two-bedroom condo in the suburbs between $500,000 and $700,000, I can say from first experience, there’s a lot of people calling, I don’t think it’s going to go down. I think there’s enough support there. I mean, unless the world changes, I don’t see those prices going down. I see I think those are going to hold.

And when I did the math from looking at New Westminster between that price ratio over the last 60 days the sales ratio is 21%. Which means less than 5 months inventory over the holiday season between 500 and 700,000 for two bedrooms in New West. So I don’t think that that category is going to go lower so for a buyer perspective start looking sooner. Don’t expect it to get cheaper and wait for the best unit to come up because the opportunity buying right now is more time and better selection.

The one-bedroom market, hard to say. The investor one-bedroom market could still struggle, but the end user, nice woodframe, Glenbrook North, good patio, one-bedroom, I think those will hold. The three-bedroom condo, the more expensive condos, the million-dollar condos, those will still struggle for a while because there’s not enough buyers up there. Pier West is a prime example of that.

And on the townhouse front, I think the opportunity for buyers is you’ve never had a better chance of getting that end unit for the price of an inside unit. The selection of town homes now compared to when the market’s hot. I mean, it’s not like they’re everywhere. Even in the complexes you brought up Ranger Lane, there’s not many listed in there. There’s one four-bedroom. So, it’s not like a lot of these like I went to Diane Springs, there’s one like there’s not they’re not oversaturated. And even if a complex has three townhouse listings, usually one or two of them are completely out to lunch on their price. So the opportunity for buyers is getting a better townhouse. And a townhouse is a longer term home.

And for the single family buyers, I think there’s opportunity across the whole spectrum from the fixer upper to the turnkey to the, you know, Coquitlam 10-year-old new 5,000 sq ft central Coquitlam homes that are 5,500 ft² or 5,000 are selling in like $2.7, $2.8, $2.9 million range, which is well below the replacement value. I said construction materials have gone up 50% in the last 8 nine years, and these houses are trading at lower prices. So the opportunities for buyers I think are there now.

If you buy tomorrow, don’t expect it to be worth 20% more in 12 months from now, but you’re more likely to be happy with where you buy, more likely to live there longer, and at some point, this market will come around and that 20% bump will be a reality for sellers.

I think the big question for a lot of sellers is you have the option to sell, the option to rent. I mean people are aware if they can if they don’t have to sell and they can stay put, stay put. It’s not a market where you’re going to get a premium price for your house. So if you do put it on market, you’re building up market history the moment you come on the market. Don’t waste your time with yesterday’s price. Price it to have a chance. Otherwise you’re just putting a lot of energy into a market that’s not there yet.

But for the sellers of these products, I think if you’re trying to move on, you’re going to make it up on the buy when you sell. You just have to eat that. If it’s an extra property, then you have the dilemma of do you want to be a landlord where rents are down and tenancy rights are up and wait for a brighter day or do you want to cut the loss today? And that’s a hard one to answer. It’s case by case. We’d be happy to help you kind of shine some light on that. But some people lean towards cutting their losses today and some people want to hold it out for brighter days. Everyone’s situation’s different.

Jamie:
On that seller note of pricing correctly out of the gate, I think that’s part of the reason that we’ve seen a few more multiple offer situations this year comparatively to last year 2024 is just the reality has set in for a lot of sellers and there is enough sales data on your street or in your neighborhood to show you that you know the price is not $1.8 million anymore in Coquitlam, it’s $1.53 million and a lot of sellers are electing to list in line with those recent sales and that is generating a lot more interest.

If you look at history over 2023 and 2024 as values were coming down, there are thousands of examples where people priced at the 2022 peak price and then 3 months later dropped 50k and then 3 months later dropped 50k and were 12 to I mean in some cases more than a year on market.

And that reality of current market value just seems to have set in a little bit more with a higher percentage of listings. I don’t know. I think that sums up the market today. Denny, that was pretty good. We’ll leave it at that. If you made it this far, thanks for tuning in.