Vancouver’s Real Estate Market is Wobbling—So What Do We Do?

Inventory is up, prices are coming down, and many homes are taking months to sell. So what should people do now?

After a decade of near non-stop growth, the Vancouver real estate market is now less than stable, and everything—from new taxes to mortgage stress tests to international trade tariffs—is stoking the uncertainty.

Inventory is up, prices are coming down, and many homes are taking months to sell. So what should people do now? Should they buy, sell or hold on for dear life? Pick up an investment property? Hold off on that downsize? We take five cases to the pros.

Leah Bjornson in her East Van condo. (Photo: Tanya Goehring)

The First-Time Buyer

Leah Bjornson 
Content Manager, 25

The Strategy: Buy a fixer-upper and ride out the market

The Thinking: As the Vancouver market began to quiet, first-time buyer Leah Bjornson picked up a 600-square-foot condo near Clark and Broadway for under $400,000 and didn’t have to weather multiple offers. The place needed extensive renos, but Bjornson wasn’t daunted by the work or by the slowing market, which she intends to ride out. “I’m not really concerned. That might be naïveté because it’s my first purchase, but we weren’t looking for a quick turnover,” she says. “We were looking at how the market is going to develop over the next 10 years.” 

Even though the condo market is weakening, adds Bjornson, she feels more secure than she did in the rental market. “I’ve heard so many horror stories of people being renovicted, or having to search for a place and suddenly they’re paying $1,000 more a month,” she says. “So for me, that was a really big motivator.”

The Expert: Trying to time the market is tricky, says Thomas Davidoff, director at the Centre for Urban Economics and Real Estate at UBC’s Sauder School of Business. So buying in a slowing market isn’t necessarily a bad idea—as long as you’re in for the long haul, as Bjornson described.

The upside for first-time buyers is that they no longer have to push their way through packed open houses, put in no-subject offers or lose out on countless bidding wars; on the contrary, they can take their time, make lowball offers, and maybe land a good deal. The key is to find a place where they’re comfortable with the monthly payments and won’t have to sell for several years. That way, if prices dip further, they won’t lose out.

“There’s not a great deal of reason to think this is going to be a gangbusters year for price growth, so by being a tough negotiator or not compromising, you’re more likely to get some reaction from the seller,” says Davidoff. “And if you miss out on this place, there will be another one next week.”


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The Downsizer

Louanne Aplas 
Semi-Retired Operating Room Nurse, 62

The Strategy: Sell and buy something smaller, but no rush

The Thinking: Thirty years ago, Louanne Aplas and her husband purchased their first home on Vancouver’s east side; as their family grew, they upsized to a Kerrisdale home on a double lot. “At the time, it seemed like a stretch. We put everything we had into it,” remembers Aplas. 

Their kids now have places of their own, and the couple is ready to downsize into a half duplex or smaller house; with their home’s value down between an estimated $500,000 and $750,000 from the peak, however, they’re in no rush. 

“We’ve been looking around, but now we’re thinking maybe we should just fix up a few things and stay put because nobody knows really what’s going on with the market,” says Aplas. If they find a property they like, she adds, they may buy and rent it out, or rent out the house, until things settle. “It’s a crapshoot,” she says. “The Vancouver real estate market always has been.”

The Expert: Veteran realtor Rod MacKay has been navigating the ups and downs of the Vancouver market since the late 1970s. He says that in the current climate, downsizers are the hardest hit, because pricier detached-home values have dropped substantially while condo and townhouse prices have, for the most part, held firm. 

“Often they want to put some money in the bank and help out their kids, but now their equity has gone from, say, $2.5 million to  $1.2 million,” says MacKay. “So the spread has shrunk considerably.”

What’s more, while the quieter market means they’ll likely have an easier time buying a condo or smaller house, selling their larger home could be another matter, with some properties sitting on the market for half a year or more—unless they’re sold at a fire-sale price. As a result, MacKay suggests downsizers sell before they buy or, if they can sustain it financially, buy, then rent one of the properties until the home sells, as Aplas is thinking of doing. 

“Then you can say, ‘We’ve got our place rented, and we’ll wait until next year and see what happens with the market,’” explains MacKay. “You end up owning two properties, but if you’re in a position to do that and it’s not going to hurt, I think that’s a pretty strong play.”

Jason Levine, pictured with his pup. (Photo: Tanya Goehring)

The Upsizer

Jason Levine 
Lawyer, 51

The Strategy: Move into a larger home while prices are down

The Thinking: Jason Levine bought his first house off Commercial Drive in 2001 and later invested in several rental properties. Then, four years ago, he sold the rentals and moved into a detached house on a small lot in Mount Pleasant. But the need for more space for his growing family, along with dropping home prices, spurred him to buy a larger home on a full lot with a laneway house.

“Because of the drop in prices, the spread between my house, which is on a 25-foot lot, and one on a 33-foot lot went down from about $500,000 to about $200,000, so for me the dip has been good,” says Levine, on the phone a day before signing off on the new place. The Vancouver lawyer is hopeful that, barring some kind of economic catastrophe, house prices won’t fall drastically; still, he watches the market with a hint of trepidation.

“Everybody’s got so much riding on the market if they own property, and if they don’t, they have even more riding on prices going down so they can get in,” he says. “So I think everybody watches it very carefully.”

The Expert: According to Tsur Somerville, senior fellow at the UBC Centre for Urban Economics and Real Estate at UBC’s Sauder School of Business, upsizers are some of the biggest winners in the current real estate climate because pricier detached homes have fallen sharply in value while condos, townhomes and some houses have remained relatively steady. As a result the gap in prices has narrowed, in some areas quite drastically; still, that doesn’t mean it’s all smooth sailing.

“The problem for them is that in a down market you get very, very slow transactions, and they can easily end up in a situation where they’re squeezed between selling and buying,” says Somerville, referring to the fact that detached homes are often taking months to sell. “The ‘buy but then can’t sell’ tends to be the bigger issue, but the other way around, it’s, ‘Oh my god, where do I live?’” explains Somerville.


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The Investor

J. Phagura 
Business Development Professional, 27

The Strategy: Buy an older condo for investment

The Thinking: Business developer J. Phagura calls himself a stereo-typical millennial: university educated, in a relationship, in demand professionally and living with his parents. But instead of looking for a place of his own, Phagura plans to buy a condo and rent it out so he can build equity and get ahead of the game.

“I’ve looked at everything from new buildings to full renovations to things that need to be gutted,” says Phagura, who has scoped out properties across Metro Vancouver. The business school student has narrowed his sights on 20-to-30-year-old condos in Burnaby or New West, where prices are more reasonable than in Vancouver but rents are high enough to cover costs. Now he’s just waiting for the market to dip a little deeper.

“Prices for apartments in those areas have dropped 10 or 20 thousand dollars, and if they drop a little bit further, I will be in a position to make a profit every month. It may only be $150 or $200, but as long as I’m not going negative I’m fine,” says Phagura, who is unfazed by the topsy-turvy market. “It doesn’t scare me. I’m actually hoping that there’s a dip with the older homes. That’s what I’m looking for. And then I want to buy.”

The Expert: Somerville says the current market is potentially risky for investors for two reasons. The first is shifting policy at all levels of government, which creates uncertainty; second, much of the sky-high demand for rentals over the last decade has come from millennials, many of whom are now starting families and moving into ownership.  

“So you’re facing a riskier environment both in terms of policy and in terms of underlying demographics,” explains Somerville, “although things could still work out if millennials choose to rent for a more sustained period than people have historically.”

Davidoff has a different concern: many large new rental developments are about to hit the market, and that influx in a slowing real estate climate could put downward pressure on both real estate prices and rents. That would be ideal for first-time buyers and renters but not for new investors, who may not be able to recoup their costs again if they need to sell in a hurry.

“Your strategy might be, ‘I’ll rent it out, but if renting it out doesn’t work, I can always flip it and make some money that way,’” he says. “But you might end up doing the opposite.” 

Haig Armen and his family. (Photo: Tanya Goehring)

The Mid-Career Homeowner

Haig Armen
Associate Professor at Emily Carr University of Art and Design, 52

The Strategy: Hunker down and enjoy the renovation

The Thinking: Among his friends, Haig Armen was the first to buy a condo in 1999, before the market really took off. By 2001 he had built enough equity to buy a 110-year-old house off Commercial Drive, where he’s now settled with his wife and two kids—and they’re not planning on going anywhere. 

“We just renoed it to exactly the way we live,” says Armen, whose parents owned multiple rental properties in Ottawa as he was growing up, so he’s not easily spooked by the ebb and flow of the market. 

Armen is banking on the house as part of his retirement, but unlike some homeowners whose nerves are kicking in, he’s relieved to see prices stabilize. “People say it’s money in your pocket, but it’s not really because if I were to sell, I would have to just buy another place for two million that’s not worth two million,” he says. 

The Expert: For many homeowners, big mortgages, high property taxes and soaring renovation costs have meant less money going into RRSPs and other retirement vehicles. Now with prices coming down, they’re seeing cracks in their nest eggs. But will those cracks widen even further? 

Davidoff says there are so many unknowns—possible government interventions, trade wars—that it’s hard to predict what will happen and when. Still, he doesn’t think a crash is in the cards: “It’s hard to see how a stable, well governed place that’s mostly well positioned for global warming isn’t going to see continued demand growth.” 

Some owners try to time the market, selling their homes with the intention of getting back in after prices have fallen—but that rarely works out, cautions Somerville. Instead, he believes that mid-career homeowners with real estate jitters should simply relax. 

“Breathe,” he says. “Most of the time it comes down to: are you in a situation where you have to move? If not, don’t worry.”