Lower mortgage rates may revive buyer demand and presale activity, but market confidence hinges on trade and economic stability. Here’s what it means for homeowners, land-owners, and developers.

As 2025 approaches, the real estate landscape in British Columbia is entering an era of change. With interest rates on a projected glide path to lower levels, the implications for homeowners, landowners, and developers are significant. Here’s what the latest mortgage rate forecast means for you and how you can prepare for the opportunities and challenges ahead.

Interest Rates and Market Confidence: A Balancing Act

The Bank of Canada is easing its overnight rate, which is expected to reach 2.5–2.75% early in 2025. Five-year fixed mortgage rates are forecasted to stabilize around 4.6%, a marked decrease from the highs of 2023. For homeowners, this is great news—monthly mortgage payments could lighten, leaving more room in budgets for other expenses.

However, it’s not all smooth sailing. The forecast mentions potential volatility caused by tariffs on Canadian exports to the U.S., which could hurt market confidence. If GDP growth falters due to trade tensions, developers may hold off on new projects, wary of softer demand and increased risks.

Full BCREA Mortgage rate forecast can be found here.

What This Means for Homeowners

For homeowners looking to refinance, 2025 could bring a golden opportunity. Lower rates mean significant savings on mortgage payments, especially for those locked into higher rates from recent years. It’s a chance to revisit your financial plan and make adjustments to take advantage of the easing cycle.

If you’re considering selling, falling interest rates could boost buyer demand, helping your property fetch a better price. However, market uncertainty could still dampen buyer enthusiasm if economic risks materialize. Timing your sale will be crucial—early in the year might be better to get ahead of potential volatility.

The Impact on Developers and Landowners

Developers will be watching closely as interest rates decline. Lower borrowing costs can reignite the condo presale market, which has been cooling over the past year. But market confidence remains key: if buyers are hesitant due to economic uncertainty, even favourable financing might not be enough to spark significant presale activity.

For landowners, especially those with properties designated for development, the picture is mixed. On one hand, declining rates could entice developers back to the table. On the other, if tariffs or economic headwinds delay projects, negotiations could stretch out longer than expected. A proactive approach—working with professionals to understand the market and maximize value—is essential.

Action Steps for 2025

Here are a few practical tips to prepare for the year ahead:

Homeowners:
- Consider refinancing early to lock in lower rates.
- If selling, consult a market expert to time your sale for maximum demand.
Landowners:
- Keep an eye on Broadway Plan and Vancouver Plan updates that might boost your property’s value.
- Start discussions early with a land broker who understands the development landscape and can connect you with serious buyers.
Developers:
- Review your financing options—2025 may offer a window of lower borrowing costs.
- Focus on presale strategies that build buyer confidence, even amid economic uncertainty.

Conclusion: Opportunity Amid Uncertainty

The forecast for 2025 reveals a mixed bag of opportunities and challenges. Lower interest rates are a clear win for affordability, but broader economic uncertainties could test market resilience. Whether you’re a homeowner, landowner, or developer, understanding these dynamics—and acting strategically—will help you thrive in this evolving landscape.

If you’d like tailored advice on navigating the 2025 market, let’s connect. With a mix of expertise, data, and creative strategies, I can help you make the most of what lies ahead.

BC Real Estate Braces for 2025: Interest Rate Cuts Signal Hope Amid Economic Uncertainty