Vancouver is one of the only condo markets in Canada favourable toward buyers right now, but that’s not going to last long, according to a new analysis of the country’s 2025 housing market.

Analysts with CIBC Capital Markets released a forecast this week predicting weakness in the housing market could last through 2025 before rebounding with prices increasing again in 2026. The authors titled their forecast “countdown to liftoff.”

“By mid-2026, a lack of supply due to the current drought in the condo pre-sale space and an extremely slow increase in purpose built activity will clash with increased demand due to
lower interest rates and recent changes to mortgage regulations, resulting in higher price pressures,” the CIBC analysts wrote.

Vancouver and Toronto are the most expensive housing markets in the country. Right now, CIBC says more new listings are appearing than properties selling, leaving them exposed to softening prices.

The analysts predict the Vancouver condo market will remain favouring buyers for all of 2025. But at some point, the listings currently on the market will sell and won’t be replaced as quickly. Pent-up demand fuelled by falling mortgage rates will entice buyers and investors back to the condo market.

“That newly found demand will be met with a severe lack of supply given that current pre-sale activity (future supply) is at a multi-decade low. That market dis-equilibrium will be on full display in 2026 or 2027 and might result in a significant upward pressure on condo prices.”

At the same time, CIBC doesn’t think immigration will decrease as much as the federal government believes it will, adding more pressure to housing supply than officials think it will.

Canada announced a slew of policy changes this year to lower immigration targets by allowing in fewer international students and issuing fewer permanent residency visas. CIBC predicts Canada’s net population will rise by 1% in 2025 and 2026, a slower pace than the 3% per year the country is currently seeing. But that slight increase in population still means increased demand for housing — especially rental housing.

“This would still translate into a 200K increase in demand for housing units (mostly in the rental space), relative to the slight decline currently projected by policymakers,” the CIBC analysts wrote.

Mortgage Renewals Less Worrying Than Some Predict

About half of people renewing their mortgage in 2025 can expect to pay about 20% more than they do now, according to CIBC’s data. But another 40% of people renewing their mortgage next year will likely see lower monthly payments. The remaining one in 10 people renewing their mortgage will likely see a nominal increase of less than 10%.

“That doesn’t look so scary if you consider the fact that over the past five years, both wages and home prices have risen by more than 30%,” the analysts wrote.

While individual households could certainly be shocked by a sudden increase in monthly payments, the country-wide impact of mortgage renewals in 2025 will be buffered by wage gains, home value increases, and households that will see decreases in payments.

Vancouver Condos to Remain Buyer’s Market in 2025 Before “Significant” Price Hikes by Megan Devlin | DH Urbanized