real (estate) talk | April 2026

Until recently, inflation (and anxieties about it) had been generally subsiding in Canada. The annual change in the consumer price index (CPI) fell below 3% in January 2024—the upper bound of the Bank of Canada’s 1-3% target range—and has been there ever since. The most recent reading from February was just 1.8%. This has been a sharp contrast to much of the prior three years when the CPI consistently registered above 3%—reaching as high as 8.1% in June 2022—as a result of pandemic-related supply shocks.

The war in Iran, however, has reignited inflation concerns. Since it started on February 28th, the Strait of Hormuz, a major shipping artery, has essentially been shuttered, which has led to a surge in energy prices globally. The strait is responsible for transiting about a fifth of the world’s oil and natural gas, as well as significant volumes of fertilizer and other petrochemical products. The average spot price of West Texas Intermediate in March, a prominent US oil price benchmark, was $91 per barrel, more than 40% above the pre-war February average. Through the first 10 days of April it was even higher, at $104, over 60% above February’s level.

The immediate impact of this here at home has been a sharp rise in the price of gasoline, with prices surpassing $2 per litre in much of the Lower Mainland. Gasoline’s outsized influence on the CPI is expected to raise the inflation rate in the near-term (March inflation data will be released later this month). However, given that oil and natural gas are critical inputs to a lot more than just transportation fuel (as important as that is), a prolonged period of elevated energy prices would put upward pressure on inflation more broadly. Per a recent analysis from economist Trevor Tombe, if oil prices hold around current levels for the remainder of the year, the CPI would tip back above 3%. In a more extreme scenario where oil prices reached $200 per barrel and held there for a sustained period, the CPI could surpass 6%. 

These developments have obvious implications for the Bank of Canada. Heading into 2026, rennie had not been anticipating further interest rate cuts by the Bank. And while the war in Iran has affirmed that forecast, it has also raised the odds of interest rate hikes should inflation (and inflation expectations) move upward more firmly. Elsewhere, interest rates have already been on the rise. For example, the 5-year Government of Canada bond yield, a key input to fixed mortgage rates, has risen approximately 35 basis points from pre-war levels. Through the first 10 days of April it averaged 3.09%, up from 2.75% in February.

The economic effects from the war in Iran are yet another headwind for housing market activity in BC, which has already been weighed down considerably by a series of international and domestic political and economic issues. Total MLS sales in the Vancouver Region in March were 2,967, down 3% from last March (3,067) and 41% below the prior 10-year March average (5,064). Through the first three months of the year, total transactions tallied 7,078, the third-fewest in comparable periods going back to 2005—only 2009 and 2019 saw less.

Notwithstanding the subdued start to the year, sales have been increasing month-to-month in a more typical fashion (they’ve just been rising from a very low base). Should that trend continue through the spring, then it is likely that monthly sales could surpass 2025 levels as soon as April; recall that activity last spring was weighed down considerably by tariff-related uncertainty. A near-term resolution to the war and an easing of inflation concerns would further support buyer confidence and activity this spring.

⁠⁠⁠The vancouver rennie review is a monthly publication that includes our take on the latest MLS data for the Vancouver Region. In addition to presenting neighbourhood-level stats, it includes information on current rennie projects, a selection of featured listings, and insightful commentary on how and why the market is changing.

Our rennie intelligence team comprises our chief economist, senior demographer, market analysts, and business intelligence analysts. Together, they empower individuals, organizations, and institutions with data-driven market insights and analyses. Experts in real estate dynamics, urban land economics, the macroeconomy, shifting demographics, and data science, their industry-leading data acquisition, analytical systems, and strategic research support a comprehensive advisory service and forms the basis of frequent reports and public presentations, covering the Vancouver, Victoria, Kelowna, Seattle, Coachella Valley, and San Diego markets. Their thoughtful and objective approach embodies the core values of rennie.