Buyers are becoming increasingly price-conscious and opting for lower priced properties, while “luxury” properties are simply not moving.
The Two Minute Market Update is intended to keep readers apprised of what’s going on in local real estate markets and in the global financial markets that affect real estate via inflation, interest rates, capital flows and public policy. It is best suited for those not able to keep up with all the news every day, but still wanting to be informed.
Two Minute Market Update, September 9th, 2025
The expected listings bump has materialized and buyers are out in force shopping for the property they need. We’ve yet to see the sales results, but that may be coming over the next few weeks. Official stats from the real estate board show a continuing decline in prices, but they remain modest on the North Shore. Detached and Condo prices are both down 4-5% year-over-year. These are based on the “House Price Index” calculated by the board. When looking instead at “average” prices, the picture is worse. Condos are down 10% and houses down 17%. Why the discrepancy? Buyers are becoming increasingly price-conscious and opting for lower priced properties, while “luxury” properties are simply not moving.
Might lower interest rates help buyers reach for higher priced properties? Just two weeks ago, I wrote that it was not yet moving the needle for buyers. After Friday’s abysmal jobs reports, however, that may change. Odds for a Bank of Canada cut in September are now over 80% and a second cut in December is more than 50% likely. The “jumbo cut” possibility (a 50 basis point move) by the US Fed is also now on the table. Bond markets have been responding to this by moving yields lower, which is what fixed rates are based on. We should keep in mind that these falling rates are a result of economic weakness in labour markets and growth forecasts. That’s not exactly something that should be celebrated by those hoping to get maximum value from a property sale. But the way psychology often works (in Vancouver especially) is that more purchasing power from buyers is simply a cause for firmness on prices and eventually rising prices as we’ve seen over the past decades.
Stock markets in Canada have been on a tear as they play catch-up with the long-outperforming US markets. How much of that is repatriated investment dollars from the US back to Canada is unclear. The newfound demand for Canadian equities has to be welcomed by those companies in need of capital to reinvest in Canadian projects. This, combined with lower interest rates, and a more permissive regulatory climate may be what the economy needs to recover organically. Markets are also optimistic that a court case striking down the Trump administration’s tariffs will both stoke damaged industries and reduce inflation expectations, causing further rate cut hopes.
Gold has indeed broken out of its months-long range and is hitting new highs on a daily basis. Prices above $4000/oz could be a reality before the end of the year. This has possibly taken some of the steam out of bitcoin, as both are a hedge against monetary inflation. But the cryptocurrency has been stabilizing around the $110,000 mark and may not be finished with its own bull market just yet. Oil is not performing particularly well, despite the typically strong seasonality, as OPEC has indicated that production cuts will be rolled back, paving the way for possible oversupply.
Matthew Stiles
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Disclaimer: The information provided in this column is for general informational purposes only and does not constitute financial, investment, or other professional advice. While I strive to provide accurate and up-to-date information, I make no warranties or representations as to its accuracy, completeness, or reliability. Any actions taken based on this information are at your own risk. Always consult with a qualified financial advisor before making any investment decisions.