Housing market activity in the Lower Mainland in May edged higher, potentially signaling a bottom in sales after an uncertainty-driven downturn that began in November.
Data from the Vancouver and Fraser Valley real estate boards revealed 4,166 unit sales in May. While this represents a 20 per cent year-over-year decrease, it marks an improvement from April’s 26-per-cent drop. Seasonally adjusted sales increased by 9 per cent month-over-month. However, this figure remains 30 per cent lower than November’s pace and is near the troughs observed in late 2022 and 2019. Current levels are above pandemic-era lows, although the region now boasts a significantly larger population base. Lower home values, more favourable interest rates, and a calmer trade war rhetoric may have encouraged more buyers to enter the market.
Despite the rise in sales, the housing market remains soft, characterized by limited transactions, elevated new listings and unsold new condos, all contributing to an oversupply in the resale market. Active listings increased 2.6 per cent month-over-month (seasonally adjusted) and 30 per cent year over year, reaching their highest levels since 2012. With the sales-to-active-listings ratio around 13 per cent, the market is firmly in shallow buyers’ territory.
While the average price climbed 2.6 per cent to $1.17 million (unadjusted), reversing April’s 2.2-per-cent decline, prices are still soft and six per cent lower than a year ago. Since the end of 2024, the average price has fallen approximately nine per cent, matching the late 2022 low, and is 15 per cent off the early 2022 peak. The location of home sales and the mix of property types influence headline average prices. However, the composite price index, which accounts for these factors, indicates negative momentum, falling 1.1 per cent month over month (seasonally adjusted) and 3.1 per cent year over year. Declines have been consistent across all product types.
Downward pressure on home prices is expected to continue through the third quarter. The market requires greater economic certainty, a reduction in interest rates, and lower inventory to achieve rebalance. While improved affordability may be on the horizon for buyers, it is likely to be temporary given long-term housing shortages.
Canadian trade deficit widens significantly in April
Canada’s international trade balance was significantly impacted by U.S. tariffs in April, as merchandise exports and imports experienced notable declines. This resulted in Canada’s trade deficit with the world widening to a record high of $7.1 billion, up from $2.3 billion in March. On a seasonally adjusted basis, exports decreased by 10.8 per cent, while imports fell by 3.5 per cent.
While provincial data is unadjusted for seasonality, B.C. saw lower merchandise exports in April, falling by 6.7 per cent year-over-year to $4.2 billion. This decline was primarily due to significant reductions in exports of forestry products and building and packaging materials, which fell by 16.5 per cent, or $179.0 million. Additionally, exports of metal and non-metallic mineral products dropped by 18.1 per cent ($70.6 million), and industrial machinery, equipment, and parts exports declined by 28.8 per cent ($69.8 million). Farm, fishing, and intermediate food product exports also decreased by 23.2 per cent ($65.5 million), and consumer goods exports reduced by 14.8 per cent ($52.3 million) during the period. In contrast, metal ores and non-metallic minerals exports increased by 14.0 per cent ($59.8 million), while energy exports rose by 3.8 per cent ($48.2 million). Motor vehicle and parts exports also grew by 9.5 per cent ($5.7 million).
On a yearly basis, non-seasonally adjusted imports to British Columbia increased by 7.2 per cent, reaching $6.4 billion.
Exports to the U.S. fell by 11.8 per cent, while imports from the U.S. fell by 11.1 per cent year-over-year as tariffs impacted cross-border trade. Although B.C. has relatively less exposure to tariffs than other provinces, prolonged tariffs will continue to negatively affect sectors such as forestry and the primary metal industry, potentially leading to further production curtailments and layoffs.
Bryan Yu is chief economist at Central 1.
