Vancouver Buyer Drought Can't Be Pinned on Trump Tariff with Andrew Lis

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The Vancouver real estate market has once again defied expectations – this time to the downside, with March sales plummeting 36.8% below the 10-year average despite lower interest rates & inventory at healthy levels. Tariff uncertainty has hit the market hard…Or has it?

Director of Economics and Data Analytics at Greater Vancouver Realtors Andrew Lis sits down with Adam & Matt to examine whether Trump’s tariffs truly explain the puzzling absence of buyers despite favorable buying conditions. Spoiler: Lis doesn’t think so. From overregulation fatigue to shifting demographics, this conversation explores the deeper forces potentially reshaping Vancouver’s housing psychology.

Has the shine permanently faded from Vancouver real estate after years of policy intervention? Why are sellers steadily entering the market while buyers remain mysteriously sidelined? And what economic trigger might finally unleash the substantial pent-up demand Andrew believes is quietly building behind the scenes? Don’t miss this revealing analysis of what’s really driving Vancouver’s 2025 market dynamics!

Why the Vancouver Real Estate Market Is Slowing in 2025 (And What Happens Next)

Metro Vancouver’s housing market in 2025 is off to a slower-than-expected start — with home sales falling 36.8% below the 10-year average in March. In this episode of the Vancouver Real Estate Podcast, we talk with Andrew Lis, Director of Economics at Greater Vancouver Realtors, to understand what’s driving the real estate slowdown — and where the market is headed next.

Metro Vancouver Real Estate Sales Slump in Early 2025: What It Means for Buyers

The year started with optimism. In late 2024, sales were trending up, and expectations for Q1 2025 included 10–12% growth in sales and a 3–4% rise in prices. But as of March, that forecast hasn’t materialized.

Interest rates are relatively stable: fixed mortgages hover around 5%, with variables closer to 4.3%. Inventory is up, providing options for both buyers and sellers. Still, sales remain low.

This disconnect between expectations and activity signals something deeper than rates alone.

Are Tariffs and Uncertainty to Blame for the Housing Market Slowdown?

Andrew Lis is skeptical that tariffs are the culprit. He recently tested this idea using an “uncertainty index” — a dataset based on media coverage of economic volatility. The correlation with Vancouver home sales? Weak at best.

Even more telling: similar patterns are emerging in the U.S. and Australia. These markets, largely untouched by Canada-U.S. tariff disputes, are seeing the same slowdowns. That suggests a more global shift is at play.

In short, uncertainty may be part of the story, but it’s not the whole picture.

Buyer Hesitation, Inventory Growth & a Market Disconnected

One of the biggest surprises in Q1 2025 is the surge in listings. Inventory in Metro Vancouver sits around 15,000 — a level Lis calls “healthy.”

Sellers are active. Buyers? Not so much. This gap points to a broader psychological shift. Real estate no longer feels like a high-stakes sport. It feels like paperwork. Policy changes, including the BC flipping tax and speculation tax, have added friction.

Many buyers seem to be waiting for a catalyst — a trigger event that brings confidence back.

Is There Pent-Up Buyer Demand Waiting to Re-Enter the Market?

Lis tested a macroeconomic model comparing actual sales to where they should be based on fundamentals (like interest rates and unemployment). The result: a growing pool of would-be buyers sitting on the sidelines.

He calls it “dry powder” demand. It builds up month over month and could be released if:

• Interest rates drop further
• Political uncertainty settles
• A clear sign of price stability emerges

Lis warns: when that trigger hits, the market could snap back quickly.

Why Home Prices Haven’t Fallen Further in Metro Vancouver

Despite sluggish sales, prices haven’t tanked. In fact, benchmark prices are holding steady or ticking slightly upward in some segments.

One reason: sellers aren’t desperate. If they can’t get their price, they wait.

Another factor is inventory type. Attached homes, in particular, remain scarce. Only ~2,200 active listings exist in that segment. Combine that with the federal increase in the insured mortgage cap to $1.5M, and you’ve got structural support under prices.

What Has Changed in Vancouver’s Real Estate Sentiment?

Lis points to two major cultural and policy shifts:

1. Policy Fatigue: Government regulation has made investing and transacting less attractive. The result? A quieter, more hesitant market.
2. Cultural Shift: Real estate isn’t seen as glamorous anymore. It’s practical, tedious, and over-regulated. The dinner-party buzz is gone.

These shifts could explain why even with favorable conditions, many buyers and sellers are less motivated.

Will Migration and Demographics Still Drive Demand?

Yes. While some residents are leaving for places like Calgary or Victoria, immigration continues to drive net growth in BC.

Lis also notes that while the millennial “buying bulge” may be past its peak, there’s still steady demographic pressure. And with Canada’s strong immigration pipeline, demand for housing isn’t going anywhere long term.

What Should Buyers and Sellers Expect Next in 2025?

The most likely trigger for a rebound, according to Lis, is a larger-than-expected rate cut from the Bank of Canada. But watch these indicators:

• Unemployment: A rise could spell trouble, especially in exposed industries
• Inflation: Still hovering above targets, it complicates rate cuts
• Federal policy shifts: Especially related to capital gains or housing investment rules

Any one of these could tilt the market quickly.

Final Word

The market isn’t crashing — it’s waiting. As Andrew Lis puts it: “There’s something in the air in Vancouver.” And until there’s clarity, much of that “dry powder” buyer demand will remain sidelined.

But when the dam breaks, we could see a return to activity and price momentum.

Frequently Asked Questions (FAQ)

Why is the Vancouver real estate market slow in 2025?

Sales dropped in early 2025 due to a mix of buyer hesitation, policy fatigue, and a psychological shift in the market. Despite stable rates and rising inventory, many buyers remain cautious.

Are tariffs affecting Metro Vancouver’s housing market?

While media coverage has focused on Canada-U.S. trade tensions, data shows little to no correlation between tariffs and local home sales. The slowdown appears tied to broader global market trends.

Are home prices in Vancouver going to fall further?

Not likely. Prices have remained surprisingly stable, especially in the attached home segment where inventory is limited. Sellers are not rushing to cut prices.

What could trigger a rebound in Vancouver home sales?

A major rate cut by the Bank of Canada, policy clarity, or an end to uncertainty could bring pent-up demand back into the market.

Is now a good time to buy a home in Metro Vancouver?

With increased inventory and steady prices, buyers have more options and negotiating power. If you plan to hold long-term, current conditions may offer opportunity before the next market upswing.

Last updated April 7 2025 by Matt Scalena PREC