Vancouver home prices have fallen for the 8th consecutive month, hitting their lowest level in 33 months. The December data confirms what many have felt for weeks: the market is cooling faster than most anticipated. Sales are slowing, inventory remains elevated, and both developers and institutional investors are feeling the strain. In this week’s report, we break down what’s driving this latest leg down — from stalled projects and falling rents to REIT dividend cuts, mortgage renewal pressure, and what to expect from the Bank of Canada next week.

Let’s start with development. One of Vancouver’s biggest stories comes from Landa Global Properties, whose two-tower West End project was approved seven years ago but still hasn’t broken ground. Originally slated for 129 market rental units and $75 million in community amenity contributions — about $169,000 per home — the proposal has since been reworked to include 51 social housing units, fewer market rentals, and no Passive House certification, in an effort to make the project financially viable. Despite its prime location, the developer says rising costs, high interest rates, and market softness have made the numbers impossible to pencil. It’s a stark example of what’s happening city-wide: pro-formas no longer work, lenders are pulling back, and the result will be fewer new homes hitting the market in the years ahead.

The arrears rate, however, remains surprisingly stable. At 0.24%, it’s unchanged month-over-month — meaning 99.76% of mortgages are still being paid on time. Ontario saw a small uptick to 0.25%, but B.C. held steady at 0.21%. Despite six months into the “renewal wall,” Canadians are holding up better than expected. The real stress test arrives in 2026, when nearly one-third of all mortgages will reset at higher rates. Still, arrears remain 32% below their 30-year average, suggesting that for now, borrowers are managing the pressure.

An intriguing shift is showing up in the banking data: for the first time in 35 years, the total number of active mortgages is falling — down nearly 2% year-over-year. Normally that number rises 2–5% annually. Some of the decline may stem from mortgage payoffs during the pandemic’s liquidity boom, a slowdown in purchases, and the movement of lending to credit unions (which aren’t included in the national data). It’s another sign that both buyers and lenders are becoming increasingly cautious.

Turning to the data, Toronto’s prices are down 25% from the 2022 peak, and Vancouver’s aren’t far behind. December sales in Greater Vancouver fell 22% month-over-month to 1,844 units — the slowest pace in 25 years — and remain 21% below the 10-year average. Inventory dropped 12% from November but still sits 36% above the decade norm. The sales-to-active ratio fell to 13% (9% for detached, 14% for townhomes, 15% for condos).

Prices followed suit. The HPI benchmark slipped another 0.3% to $1,123,700 — down 5.5% from  March’s annual high — bringing values back to February 2023 levels. Median and average prices also declined, to $950,000 and $1.24 million respectively.

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