TD Economics: Vancouver Condo Market Still Searching for a Floor

TD Economics: Vancouver Condo Market Still Searching for a Floor

Say what you want about bank economists, but TD’s latest housing report on the Greater Vancouver condo market is worth paying attention to. The bank’s economists have just revised their forecast, and the message is clear: Vancouver condo prices are going to keep falling through 2026, and the correction could be deeper than most people expect.

The Numbers TD Is Working With

TD forecasts condo prices will decline roughly 7 to 8 per cent on a year-over-year basis in 2026. That follows the adjustment already underway since prices peaked in October 2023. Combining both years, TD projects Vancouver condo prices could fall approximately 15 per cent from their 2023 peak — marking the steepest decline on record going back to at least 2005.

The average condo price is projected to come down to roughly $712,853. For context, that’s not just a correction — it’s the kind of drawdown that wipes out years of equity gains for buyers who purchased at the top.

Why Demand Has Collapsed

Sales in the first four months of 2026 fell 16 per cent compared to last year, reaching their lowest non-pandemic levels since late 2018 and early 2019. That was back when the Bank of Canada’s rate hikes, tighter mortgage stress tests, and provincial measures designed to cool affordability caused a massive sales collapse from the 2017 peak.

The GVA labour market has been a major headwind. Since last June, employment is down about 2 per cent — roughly minus 32,500 positions. The labour force itself is declining. And the unemployment rate has risen about 0.5 percentage points, hitting its highest level since early 2025 in May at 6.7 per cent on a three-month moving average basis.

The trade war has hit hard. Manufacturing, wholesale and retail trade, transportation and warehousing have all pulled back hiring. Meanwhile, BC’s depressed housing market has restrained hiring in finance, insurance and real estate — creating a feedback loop that makes the situation worse.

Supply Overhang Is Real

The sales-to-active-listings ratio — TD’s measure of demand versus supply balance — is some 50 per cent below its long-term average. That means for every buyer in the market, there are twice as many listings as usual.

Benchmark prices dropped slightly from their October 2023 peak through early 2025 before giving way to more pronounced declines. Year-to-date, year-on-year, prices are down 7 per cent.

Compare this with Toronto for context. The GTA condo market is grappling with historically high listing levels. Falling rents and higher carrying costs have pushed investors to list their properties en masse. Condo completions had been elevated, although they’re rapidly retrenching now. The one-two punch of chilly demand and high supply has sent GTA condo prices down about 25 per cent from their peak.

Vancouver’s condo stock is more heavily skewed toward end-users rather than investors. Condos account for about 50 per cent of resales in a typical month, and affordability constraints in the broader housing market make condos the more attainable entry point. That creates a less volatile base for demand relative to Toronto, where investors played a larger role.

When Will Prices Stabilize?

TD sees stabilization coming in the first half of 2027, before flattening out in the second half. For 2027 overall, condo prices are likely to be about flat year-over-year.

The logic is straightforward: declining prices through 2026 will bring improved affordability, which should boost activity. Pent-up demand accumulated during the downturn should support the market. Condo completions are falling quickly, adding less upside pressure to supply.

But there’s a catch. Vancouver’s recovery will be tempered by still-soft population trends in the province, and hiring should only gain some traction next year alongside a firming in economic activity. Labour market conditions are likely to remain muted. Together, these factors point to only a gradual and modest strengthening in sales over the next 12 to 18 months.

Sales are likely to hold well below 10-year averages through next year.

The Pre-Pandemic Floor

Here’s an important distinction between Vancouver and Toronto. Even by the end of this adjustment, benchmark condo prices in Vancouver will likely remain above their pre-pandemic level. In Toronto, prices are projected to fall meaningfully below pre-pandemic benchmarks.

Vancouver’s downturn is pronounced but less extreme. The end-user base is stronger, and condos serve as the primary affordable entry point in a broader housing market that’s priced most buyers out.

What This Means for You

If you’re a seller, expect extended time on market and price concessions. If you’re a buyer, prices should continue falling through 2026 with no immediate catalyst for a rebound. If you’re a developer, the predicted price drop may impact pre-sale viability and financing terms.

The trade war, high borrowing costs (rates rose to 5 per cent from 0.25 per cent), weak population growth, and elevated inventory levels are all working against stabilization. TD economists note this adjustment process is ongoing with no immediate catalyst for a rebound.

The bottom line: Vancouver’s condo market is in the midst of a notable correction. We expect prices to decline further in 2026 before stabilizing in 2027. Source: TD Economics, “The GVA’s Condo Market is Still Searching for a Floor” (via BIV).