While some of Canada’s luxury housing strongholds have defied the trade war, Vancouver is seeing a significant drop in purchases and sales compared to last year, marking the biggest fall in all of the country compared to other major cities.
A new report from Sotheby’s International Realty Canada shared some first-quarter luxury housing market highlights for 2025.
While Vancouver saw a slight uptick in January, Sotheby’s International says that “consumer sentiment in Vancouver took a downturn in February.”
It added that “although the lower end of the luxury market saw some movement as buyers renewed their activity with monetary policy easing, both buyers and sellers remained hesitant overall, concerned about the impact of these geopolitical issues on the city’s economy, job market and housing values.”
“As a result, Vancouver’s overall housing market cooled over the first quarter, weighed
down by recent shocks.”
That downturn amounts to a 48 per cent year-over-year drop in first-quarter sales for properties over $4 million. The sales drop in the $1 million-plus condo market was also significant, with a 27 per cent drop compared to the first quarter last year.
“Both buyers and sellers held off on transactions.”
Sotheby’s International also shared some sobering analysis of the general state of Vancouver’s economy.
“Activity across Vancouver’s conventional and luxury residential market stalled as the threat of tariffs reverberated across the city’s lagging economy.”
Other factors impacting the market include waning confidence in the job market, which delayed buying activity, and “the accumulation of property listings across the housing market entrenched buyers’ market conditions,” Sotheby’s International states.
“Overall, $1 million-plus residential sales declined 30 per cent year-over-year. These represented the most significant annual declines for luxury residential sales out of Canada’s major metropolitan real estate markets.”
There also wasn’t a single ultra-luxury $10-million (or higher) property sold in the first quarter.
Despite the woes, Sotheby’s President Effi Barak says this could mark an evolution for the market, and the state of the market now could mean good things for buyers in the future.
“According to Barak, the luxury condominium markets in Vancouver and Toronto are evolving into compelling long-term opportunities. Elevated inventory levels, soft demand, and the retreat of smaller-scale investors are placing downward pressure on prices, creating advantageous conditions for well-positioned buyers.”
Sotheby’s International Realty Canada also warns that the trade war could impact construction costs, slowing new development and constraining future supply. This reality would support the value of the existing condo supply.
Single-family homes are still the top choice for Vancouver luxury buyers, which accounted for 94 per cent of residential sales over $4 million in the first quarter.
The report also notes that a lack of “missing middle” supply continues to constrain top-tier attached home sales, as no attached homes (like townhomes) over $4 million were sold in the first quarter.
Vancouver’s luxury market will be “firmly” a buyer’s market this spring, thanks to the slow sales leading to a build-up of inventory, especially in the condo market. For sellers, Sotheby’s International suggests listing properties at competitive prices, “as quality will continue to drive transactions, even in a slower market.”
Has the ongoing trade war impacted your decision-making in the housing market?