Vancouver\u2019s housing market is in a transition year and heading toward recovery, predicts economist Benjamin Tal, a key figure in Canadian real estate for identifying market trends and advising industry leaders and government.<\/p>\n
\u201cThe way I look at it, I see 2026 as a transition year between something bad to something better,\u201d said Mr. Tal, managing director and deputy chief economist for CIBC Capital Markets Inc.<\/p>\n
Open this photo in gallery:<\/a><\/p>\n Economist Benjamin Tal: \u201cI think that you will see more people entering the market, realizing that that\u2019s the bottom as far as the Bank of Canada is concerned.\u201dTijana Martin\/The Globe and Mail<\/p>\n \u201cI think that the fundamentals are there. And the minute you have the supply story ending in the condo market \u2013 which would be two or three years from now \u2013 we will start to see some upward pressure.\u201d<\/p>\n People had been hesitant to buy because they expected more rate cuts, he said. <\/p>\n \u201cI think that the Bank of Canada made it very clear that they\u2019re not going to cut any more. Something really bad will have to happen for them to cut. So, I think that you will see more people entering the market, realizing that that\u2019s the bottom as far as the Bank of Canada is concerned. That will add a little bit to the spring market,\u201d said Mr. Tal. <\/p>\n \u201cThe minute you reach this point, with interest rates more or less where they are, I think the housing market can show nice recovery in 2027.\u201d<\/p>\n 2026 in Charts: Where\u2019s the housing market headed in 2026? Keep an eye on these seven charts<\/a><\/p>\n However, Metro Vancouver is a tale of two markets, and the presale and newly built condo market is far different than the \u201clow-rise segment,\u201d such as townhouses and detached homes. That latter segment is resilient and will continue to be popular with millennials. The only factor that could lower the prices of ground-oriented housing is if boomer-age homeowners were to vacate their houses and add to supply, but that\u2019s not going to happen any time soon, said Mr. Tal.<\/p>\n \u201cUnfortunately, I don\u2019t see prices [of houses] going down in any significant way,\u201d said Mr. Tal. \u201cThe supply story is different; the inventory story is different. The demand is still there, and with interest rates stabilizing, the demand will continue to be there. So, I think that this market will not be surging by any stretch of the imagination, but it will remain relatively elevated. It\u2019s definitely a tale of two markets.\u201d<\/p>\n Part of the reason he sees 2026 as the year of improvement is that U.S. President Donald Trump has the pressure of midterm elections coming, and he\u2019ll face resistance from his base because of the perceived negative effects of tariffs. For Canadians, the uncertainty around tariffs will disappear as trade barriers reduce. Time is not on the President\u2019s side, said Mr. Tal.<\/p>\n \u201cOf course, you never know. But I think that\u2019s a reasonable scenario,\u201d he added.<\/p>\n