Spring is in full swing mode: the weather is warmer and outdoor actives are picking up.  What was supposedly to a traditional busy spring market has turned out to be the exact opposite, thanks to 3 consecutive months of relentless political turmoil and uncertainly.  In May, the Vancouver real estate market has officially entered in a period of highest inventory in a decade.  With Canada having (kind of) a new leader in place, there is a bit more clarity and direction where this country is going.  However, tariff is starting to settle into the economy as Canadian unemployment rate jumps to 6.9% last month.   Again, lots to unpack this month.  Let's take a deeper dive.   

For the past two weeks, the tariff news seem to have subsided, but market volatility remains.  Businesses are still on high alert, and so are Vancouver real estate Buyers, who mostly continue to take the wait-and-see approach.  Last month, Vancouver sales were down -28.2% below the 10 year average, while total inventory has shot up a monstrous +47.6% above the 10 year average.  To put the polarizing trend into perspective, last month's sales were the second lowest April sales (first was in 2019) dated back in 2005.  When diving deeper between the total sales and total inventory, we're looking an a spread of a 75.8% deviation from the 10 year average.  In other words, we are seeing one of the slowest market in three decades.  With boots on the ground, the polarity seem to is segmented.  For example, open houses in apartments are having only a handful of Buyers come through, whereas townhouses and single house fare better.  Some Buyers are taking advantage of this once-in-a-decade chance to upsize in a favourable market for them.  However, when sales are slow like now with little to no churn, a Seller who can't sell their home simply cannot buy either.  This ripple effect may be exasperated in the typically slower summer market if more listings pile into the market, which may seem a very likely case.  There were a lot of noise about pent-up demand, but for now, they are nowhere to be seen.  Greater Vancouver currently has 7 months of inventory (typically 4 months is healthy), so that means it will take at least till end of the year or early next year before the market will digest the current supply.  

On the economic front, Canada's unemployment rate rose to 6.9%, which is the highest since November 2023 by adding a measly 7,400 jobs.  If we strip out the temporarily election hiring boost, the unemployment could've been higher.  As for inflation, April has registered a much lower rate at 1.7% due to the removal of carbon tax.  However, core inflation has edged over 3% and is at an alarming rate.  We are seeing early evidence that the tariff is eroding into the economy, and the hardest hit province continue to the Ontario, where the auto sector, steel & aluminum export and manufacturing continue to hurt.  Statistic Canada shows even a grimmer picture, stating that 1.6 million people are out of work, and of those affected, the younger worker aged between 18-25 got it worst.  In short, 31,000 manufacturing jobs were lost in April alone.  For the same reason, I wouldn't doubt that Canada's new leader, Mark Carney, is drumming up new ideas and ways to appease the US in hopes of saving the Canadian economy.  It was ironic that Carney ran his campaign wanting Canada to lessen its reliance on US, and make Canada strong, but as soon as he took office, he met with Trump as his first priority (which is rightfully so in solving the short-term problem).  It remains to be seen how soon a real deal is struck, and my thoughts are that a deal wouldn't be that far away: Canadian simply really don't have the patience for three more months of tariffs.  Carney is one of Canada's most highly-educated Prime Ministers, and whether we like him or not, his wealth of knowledge and his elitist background may help Canada out of this decade long economic stagnation.  And on the other hand, his $200 billion budget deficit proposal may just take Canada deeper into the financial rabbit hole.  He also has not financial budget for this year, which is a worrying sign.  Either way, changes are coming, they need to come quick if Canada wants to stay afloat.  

Some of the unique trends I've been observing:

1.  Canada's new prime minister, Mark Carney, has just appointed his cabinet and selected Gregor Robertson as the new housing minister, whom was also the former Vancouver mayor.  Robertson is now given the monumental task of overseeing and building 500,000 homes per year, which is two times more than homes ever built per year in Canada.  On a recent viral interview, he emphasized that he doesn't see the housing prices come down, but Canada needs more rental housing.  In other words, he's intended to keep home prices elevated and protect the wealthiest voters.  In another reminder that during Robertson's tenure as Vancouver's mayor in 2008-2018, the housing affordability got much worse and home prices increased by 241% during that period.  Would Robertson's track record really help Canada's housing move forward?  

2.  Despite the spring market, the Vancouver real estate continues its deep freeze and had the second worst month of sales in April, with monthly sales dipping further to -28.2% (compared to -36.8 in March) below the 10 year average, while total inventory continues to pile up to +47.6% (compared to +44.9% in March) above the 10 year average.  The spread between the sales and inventory in April was 75.8%.  Simple put, there is nearly no churn to the market as Buyers continue to wait-and-see.  If spring sales was a multi-decade low, then one can only imagine what the summer slower reason would have in store. 

3.   Canada's unemployment rate hit 6.9% last month (compared to 6.7% in March).  If it weren't for the temporary election boost hiring, the unemployment rate might've hit over 7%.  The youngest employees aged 18-25 were hit the hardest.  With housing affordability still out of reach for many first time home buyers under 30 years old, Canada's next generation really is pay the price for this generation's mistake.  I wouldn't be surprised if some of them would just leave the country altogether. 

4.  The pre-sale scene is Toronto and Vancouver is nearly non-existent now.  Toronto, the epicentre of the condo crash market, has just hit one full year of inventory (normally 4 months is healthy).  Meanwhile, Vancouver developer Westbank, whom once sold a downtown pre-sale that was priced at $3000 per sf, has now hit the ceiling of $1800 per sf for such pre-sale in the area.  "Correction" would be an understatement.    

5.  Speaking of correction, the Canadian real estate prices are nearly -16% from its all time peak in Feb 2022.  Obviously, this was more evident in major cities like Toronto and Vancouver, and less so in Calgary or Montreal.  With Canadian economic still being fragile, the correction is not done yet.   

Here are the 3 highlights for April:

-  Total inventory of 15,772 units is the highest April total inventory since April 2014. 
-  April has officially solidifies the trend of the decreasing sales for the past 3 months.  The deep freeze continues.   
-  Prices slipped slightly last month by -0.5%, and for the past 3 months the average price remained nearly flat at +0.9%. 

Here are the in-depth statistics of the April: 

-  Last month's sales were -28.2% below the 10 year April's sales average.
-  Month by month residential home sales increased by +3.2% from March 2025.
-  Month by month new home listings continue to climb by +6.2% compared to March 2025.  Inventory is now at a decade high level, and doesn't seem to be slowing.  
-  Last month's price remain nearly flat at -0.5%.
-  Sales-to-listing (or % of homes sold) ratio is remained flat at 13.8% (compared 14.9% in March).  By property type, the ratio is 9.9% for single houses, 17.5% for townhouses, and 15.7% for apartments/condos.