it’s not hard to game-theory out a situation where central banks begin to again massively inflate the money supply
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.
TMMU – Drunken Sailors, December 3rd, 2025
See the most recent monthly statistics for Lynn Valley and North Vancouver real estate.
The numbers for November are in and across the Greater Vancouver region, they were pretty abysmal. Sales numbers were down compared to last year, despite higher inventory, and prices continue to grind lower. Single family detached homes saw a fairly sharp price decline in North Vancouver, reducing the total return to only 14% since the summer of 2016. North Van condos have fared worse, with a 12% return over the same period. Townhouses are the winner, with a nearly 30% return. While it’s an arbitrary starting date, I think there’s some significance to it, as it marked a psychological euphoria for many home owners.
Lynn Valley Entry-Level Houses ($1.4-2.1M) | All North Vancouver
Lynn Valley Move-Up Houses ($2.1M-2-8M) | All North Vancouver
With barely 1% price growth annually, home prices have underperformed inflation for a very long time. Cumulative inflation since 2016 is closer to 28% (as calculated by StatsCan). None of this accounts for cost of ownership either. Of course, for many, homeownership is not an “investment” but a “place to live”. For many others (namely investors and retirees), it is their primary or only asset(s) needed to support their needs in the future. Underperforming the rate of inflation is unsustainable over the long-term. Why this matters is the concept of “psychological capitulation” looms over the market the longer this underperformance persists; that these owners of real estate may be forced into selling and pivoting their financial assets into those with better performance track records.
That capitulation has already begun but is not yet self-fulfilling or resulting in panic. This is good. Orderly market transitions are in almost everyone’s interest. Whether it reaches those levels in 2026 will depend on if buyers can find enough confidence in valuing properties near this level to facilitate. One source of that confidence may come from higher inflation expectations. With ballooning budget deficits from governments, deteriorating economic fundamentals and already high debt levels, it’s not hard to game-theory out a situation where central banks begin to again massively inflate the money supply to ensure enough liquidity exists to support the growing amount of debt. Known in economics as a “crack-up boom”, it is described as:
Once public opinion is convinced that price increases will never end, everyone becomes eager to swap their money for “real goods” (commodities, real estate, precious metals, or even stable foreign currencies or alternatives like Bitcoin) as quickly as possible, regardless of the price. This flight from cash causes the currency’s purchasing power to vanish completely within a very short time, leading to the breakdown of the entire system of exchange.
Lynn Valley Townhouses | All North Vancouver
Lynn Valley Condos | All North Vancouver
Let’s hope it doesn’t come to that. Even a moderate version of the above (as we experienced during the pandemic), would put a floor under real estate prices. The prospect of it, driven partly by speculation that Trump’s pick for Fed Chair will be “dovish” on rates, may be contributing to the stock market’s performance of late. After we reported dips for most markets in the last report, they promptly recovered almost all their losses. December is a historically good month for stocks, as money managers conduct “window dressing” and consumers drive “Santa Claus Rallies” in most years. Ho Ho Ho!
Bitcoin has gone on some wild rides, nearly dropping as low at $80,000 on what now appears to be a final washout. Still, 7-8% swings daily are tough to swallow for many. Reclaiming $100,000 would be a significant milestone, indicating that “the cycle” might not be over yet. Gold is continuing its strength but hasn’t yet taken out new highs. Silver, on the other hand, is toying with $60/oz, while Copper has been stubbornly above $5/lb. Keep an eye on these markets as they may offer clues about the direction of real estate longer term. Inelastic supply is your friend when governments and central banks behave like drunken sailors.
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.