Vancouver enters 2026 at a rare crossroads. Home prices have slipped to a three-year low, annual sales volumes have fallen to levels not seen in a quarter century, and yet Canadians brought a record number of homes to market in 2025. The disconnect between supply and demand is no longer theoretical—it’s visible across prices, borrowing behaviour, and broader economic indicators.

Beneath the surface, household balance sheets are doing more of the heavy lifting. While transaction activity remains subdued, borrowing against housing has accelerated. Recent national data shows home equity line of credit (HELOC) balances climbing to nearly $180 billion, the highest level in six years, after a decade-long pullback. Credit itself isn’t inherently problematic—many homeowners use it productively to renovate or reinvest—but the concern today is why borrowing is rising while sales slow. When leverage grows to cover higher living costs or to refinance other debt, risk accumulates quietly. The current pattern bears uncomfortable similarities to 2017, when investor-led borrowing rose amid soft resale activity and a wave of new supply.

Commercial real estate tells a parallel story of recalibration. Downtown Vancouver office vacancy rose to 12.8% by the end of 2025—the highest level in over twenty years—driven largely by oversupply from recent project deliveries and a continued “flight to quality.” Older Class B and C buildings now sit near 18% vacancy, while top-tier space remains comparatively resilient. Construction has slowed sharply, signalling that the market is adjusting, not collapsing. Even so, Vancouver remains one of Canada’s most structurally resilient office markets, with vacancy still below Toronto and Ottawa.

Early warning signs are also emerging in household stress metrics. Mortgage arrears in Canada reached a five-year high late last year. British Columbia remains below the national average, but at its highest level in six years. With more than one million mortgages set to renew in 2026—many at higher payments—this pressure is unlikely to ease quickly.

A comparison with Toronto underscores Vancouver’s uniqueness. GTA sales also fell to a 25-year low, but inventory there has surged to record highs and prices are now down roughly 27% from the 2022 peak. Vancouver’s correction has been more measured—but persistent.

Locally, December data reinforces the theme. Sales volumes remain well below historical norms, inventory is at a 12-year high for this time of year, and days on market have stretched to levels last seen in 2019. Prices continue to drift lower: the benchmark index is down for the ninth consecutive month, returning values to early-2023 levels, with detached, townhomes, and condos all sharing similar declines.

Looking back, 2025 closed with the fewest home sales since 2000—yet also the highest number of listings on record. That imbalance sets the table for 2026: a market with abundant choice for buyers and intensified competition for sellers. What happens next will hinge on confidence—both in household finances and in the broader economic outlook.

Next week, we’ll outline what this means for sales, supply, and pricing as the year unfolds.

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Dan Wurtele, PREC, REIA

604.809.0834

dan@thevancouverlife.com

Ryan Dash PREC

778.898.0089
ryan@thevancouverlife.com