Vancouver's Cooling Market: A Buyer's Paradise in Condos and Secondary Markets

The Vancouver housing market has entered a transformative phase, with declining sales, soaring inventory, and price corrections creating a starkly buyer-favorable environment. For investors, this shift presents a rare opportunity to pivot toward undervalued assets in secondary markets and condos—sectors where resilience and affordability are aligning to outperform Vancouver's traditionally dominant detached housing segment.

The Market's New Reality: Oversupply and Price Pressure

Vancouver's housing landscape in 2025 is defined by record inventory levels and slumping sales, with active listings hitting 17,094 in May 2025—a 25.7% annual increase and 45.9% above the 10-year average. This glut has driven the sales-to-active-listings ratio to 13.4%, firmly cementing a buyer's market. Concurrently, prices have trended downward: the benchmark composite price fell to $1.18 million in June 2025, a 2.9% annual decline.

Detached homes, once the crown jewel of Vancouver's market, now face the sharpest corrections. Their benchmark price dropped 3.2% year-over-year to $1.997 million in June 2025, while condo prices held relatively steady at $757,300—a mere 2.4% annual decline. This divergence highlights condos' greater price resilience and affordability, making them a strategic focus for investors.

Why Condos Offer Undervalued Potential

Condos are the unsung heroes of Vancouver's current market. Despite their proximity to urban amenities, they remain 50–60% cheaper than detached homes and have absorbed buyer demand more effectively. In May 2025, condo sales fell only 18.8% year-over-year, outperforming detached homes' 22.7% decline.

Key advantages for investors:
1. Liquidity and Accessibility: Condos' lower price points (average $762,900 in April 2025) and smaller lot sizes reduce entry barriers.
2. Rental Yield: Vancouver's tight rental market—especially for younger professionals—supports steady demand.
3. Interest Rate Leverage: With 5-year fixed mortgage rates as low as 3.79% (as of April 2025), borrowing costs are competitive, even after stress-testing at 5.79%.

The Case for Secondary Markets: Suburban BC and Interior Regions

While Vancouver's core grapples with oversupply, secondary markets in suburbs like Surrey, Burnaby, and interior regions such as Kelowna and Victoria are emerging as growth hubs. These areas benefit from:
- Lower Prices: Suburban detached homes average $1.2 million, 40% less than Vancouver's $2 million detached median.
- Job Market Strength: Tech hubs in Surrey and Kelowna's wine-and-tourism economy are attracting talent, boosting demand.
- Infrastructure Investment: New transit projects (e.g., Surrey's LRT expansion) and housing policies targeting affordability are improving accessibility.

Risks and Considerations

• Further Price Declines: If inventory surpluses persist, detached-home prices could drop another 5–10% in 2025.
• Interest Rate Uncertainty: While current rates are low, geopolitical risks or a U.S. rate hike could pressure Canadian borrowing costs.
• Long-Term Hold: Vancouver's recovery timeline hinges on economic stability; investors should prioritize long-term horizons of 5+ years.

Investment Strategy: Pivot to Condos and Suburbs

Investors should:
1. Target Condos in Prime Urban Locations: Focus on well-maintained buildings near transit or amenities, where rental demand is strongest.
2. Diversify into Secondary Markets: Allocate 30–40% of real estate portfolios to suburbs like Surrey or interior cities like Kelowna, where growth trajectories are rising.
3. Lock in Low Rates: Secure mortgages at 3.79–4.18% to capitalize on affordability, but stress-test budgets at 5.79% to avoid overextending.

Conclusion: The New Vancouver Playbook

Vancouver's cooling market isn't a crisis—it's a recalibration. The era of detached-home dominance is waning, and investors who pivot to condos and secondary markets will position themselves to profit from undervalued opportunities. While patience is required, the alignment of falling prices, competitive rates, and shifting buyer preferences makes this a critical moment to build stakes in Vancouver's next growth phase.

The time to act is now. Buyers who prioritize affordability, liquidity, and long-term growth will thrive in this buyer's market—and the next cycle will reward the bold.