British Columbia’s housing market is showing signs of repeating the post-global financial crisis cycle that ultimately led to severe undersupply and a sharp deterioration in affordability, according to a new report from the BC Real Estate Association (BCREA).

The association says unsold new-home inventory has climbed to a 30-year high, particularly in the apartment segment, as weak pre-sales make financing difficult and prompt developers to delay or cancel projects.

That slowdown risks leaving the province short of new supply when demand is anticipated to recover later in the decade. The report says this could push inflation-adjusted home prices up as much as 27% by 2032.

Why Today’s Market Feels Like Post-2008?

BC’s housing market is persevering through a “several-year malaise,” the report says, facing challenges like higher interest rates and trade uncertainty.

While many regions have recovered from the initial U.S. tariff shock, the housing markets in the province’s largest areas continue to struggle, it says.

“That weakness has not been contained to the resale housing market. Uncertainty compounded an already difficult development environment in 2025, prompting cancelled projects, developer bankruptcies, a cratering pre-sale market and a rapid accumulation of unsold new units.”

The level of completed and unsold inventory in BC currently sits above 7,000 units, a level not seen since the late 1990s. Inventory build-up has been driven by apartments, which account for nearly two-thirds of all newly constructed and unabsorbed inventory.

This pattern echos the overall market behaviour following the financial crisis of 2008, a period in which the absorption of standing supply lagged, causing a slowdown in homebuilding through the rest of the 2010s.

“Ultimately, demand not only recovered but roared and collided with a market that had been severely undersupplied, leading to a dramatic deterioration in housing affordability that set the stage for the housing crisis of today,” reads the report.

Conditions Risk Eventual Price Acceleration

Today’s market exhibits similar dynamics and vulnerabilities as back then, as market demand remains weak amid economic uncertainties.

However, “history tells us that a strong recovery is inevitable,” reads the report. “Consequently, BC could be in danger of repeating the post-(global financial crisis) cycle, setting the stage for further deterioration of affordability.”

BCREA performed a model simulation of today’s market conditions, comparing it to 2008-2018, which showed unsold new inventory continuing to rise through 2026 before cresting.

Elevated inventory and a weak pre-sale environment will prompt more developers to delay or cancel projects, leading to a fall in housing starts and an eventual drop in completions toward the end of the decade. As a result, active listings are expected to peak in 2027 before steadily decreasing as demand recovers to historical norms.

“Taken together, prices, while expected to remain flat over the short-term, are at risk of accelerating sharply toward the end of the decade, similar to the pattern observed in the back half of the 2010s.”

What Can Policymakers Do?

BCREA suggests that in order to curb worsening affordability, a two-pronged approach to policy must be used to balance out supply and demand. It argues that unlocking supply will require measures aimed at reducing standing inventory by strengthening demand for new housing, particularly in markets where sales activity and construction have lagged.

On the demand side, the report outlines two policy options.

• Expanding the GST exemption on new homes beyond first-time buyers to all purchasers could support demand, especially for apartments and semi-detached homes in the Lower Mainland, where sales activity and construction activity lag behind the rest of the province.

• It also calls for a reassessment of foreign-buyer participation in the pre-sale market, as weaker domestic demand has made financing new projects more difficult.

“….. Pre-sales are the cornerstone to launching multi-unit construction, as they represent a vote of confidence for lenders. If builders are unable to pre-sell about 65% to 70% of a project, banks are largely unwilling to finance construction due to default risk.”

Supply-Side Policy

The report says that expanding supply is the most important ingredient to moderating price growth in the future.

Ultimately, it says, policymakers must focus on making homebuilding an attractive business to be involved in. The two channels to accomplish this, BCREA points out, are increasing potential revenue by drumming up demand and reducing costs to build.

It offers two recommendations to policymakers :

• Provide immediate relief to developers by reducing development and amenity cost charges.

• Allow municipalities, within strict parameters, to offer tax-advantaged municipal bonds to private investors.

Bottom line

If the warning signs are ignored, BCREA says BC remains as vulnerable as it was over a decade ago.

“Ultimately, we need to learn the lessons of the post-(global financial crisis) housing cycle. If not, we risk repeating the same mistakes and making the prospect of home ownership in this province even more challenging in the years to come.”

BCREA Warns : Housing Market Risks Repeat of Post-2008 Crisis by Courtney Zwicker | REM Real Estate Magazine