wanted: confidence in Vancouver’s housing market

The rennie podcast is about the real estate market and the people connected by it. Tune in for monthly discussions making sense of the latest market data.

EPISODE #76: WANTED: CONFIDENCE IN VANCOUVER'S HOUSING MARKET

What’s really holding buyers back in Vancouver’s housing market? rennie’s Head Economist and Vice President of Intelligence Ryan Berlin and Lead Analyst and Market Intelligence Manager Ryan Wyse sit down with rennie advisor Shawn Wentworth to unpack market uncertainty, buyer sentiment, and whether recent policy moves—like the Bank of Canada’s rate decisions and the GST exemption for first-time buyers—are enough to move the dial on home sales.

Featured guests:

Ryan Berlin, Head Economist and Vice President of Intelligence

Ryan Wyse, Lead Analyst and Market Intelligence Manager

Shawn Wentworth, rennie leader and advisor

Thank you for tuning in to The rennie Podcast, where we share our passion for homes, housing, community, and cities. We hope today’s episode sparked the same curiosity in you that drives us every day. If you enjoyed the conversation, don’t forget to subscribe and follow us on your favorite podcast platform. And if you have a moment, we’d love for you to leave a review—it helps others discover the insights, analysis, and perspective we bring from the rennie Intelligence division. For the latest market updates, be sure to register at rennie.com.

Have a real estate question? You can either email us at intel@rennie.com, or leave a voicemail at speakpipe.com/therenniepodcast, and we’ll try to respond in our next episode.

Transcript

Transcript

Welcome to the rennie Podcast, where we talk about the real estate market and the people connected by it. Our goal is to empower you to make informed decisions and provide context for the real estate world around you. We hope that with every episode, you will become a little more knowledgeable and a lot more curious. 

Ryan Berlin: Welcome to the rennie Podcast. I'm Ryan Berlin, head economist and vice president of intelligence here at Rennie. 

Ryan Wyse: And I'm Ryan Wyse, our market intelligence manager and lead analyst. 

Ryan Berlin: And we are joined once again by none other than Shawn Wentworth, realtor and advisor, uh, extraordinaire here at Rennie. You live and work in the Sea to Sky Corridor. 

Shawn Wentworth: Definitely. 

Ryan Berlin: Working from Squamish up to Pemberton. You've been a realtor for the past 20 years. You've been with Rennie for the past four. You have been President's Club, so top 1% of realtors in this market on multiple occasions. Uh, 14 times you've been a Medallion Club member, so top 10%. 

Shawn Wentworth: Yup, I am definitely feeling old. 

Ryan Berlin: Do you need more? 

Shawn Wentworth: I'm definitely feeling old. 

Ryan Berlin: Do you need more accolades as well? 

Shawn Wentworth: Yeah. No, no, we're good. Definitely feeling old. 

Ryan Berlin: So, um, you know what you're doing and, uh- 

Shawn Wentworth: It's a rumor 

Ryan Berlin: ... we're really happy to have you on. 

Shawn Wentworth: Excellent, I'm glad to be here. Glad to see you guys again. 

Ryan Berlin: So it's funny, um- 

Ryan Wyse: Welcome back 

Ryan Berlin: ... w- I looked, we have a list of past guests, and I remember recording with you previously, and I thought it was maybe a year and a half ago? 

Shawn Wentworth: [laughs] 

Ryan Berlin: But my memory failed me, so it was four years ago. 

Shawn Wentworth: Four years, I know. 

Ryan Berlin: Four years ago. So back then, so this was in the fall of 2021. 

Shawn Wentworth: Yup. 

Ryan Berlin: So sales were booming. 

Shawn Wentworth: Crazy time. 

Ryan Berlin: Crazy time. So we had, so that year, once that year wrapped, we had a record number of resales in this region. So it was 72,000. 

Ryan Wyse: Yeah. 

Ryan Berlin: We had 27,000 pre-sales, which is like- 

Ryan Wyse: [laughs] 

Shawn Wentworth: [laughs] God. 

Ryan Berlin: I think it's double, that's double the- the average. 

Ryan Wyse: 100,000 transactions. 

Shawn Wentworth: Yeah. 

Ryan Berlin: 100,000 transactions. And then resale inventory by the end of that year got down to around 6,000. So I mean, that was, it was the lowest we'd ever had. On a per capita basis- 

Shawn Wentworth: Definitely 

Ryan Berlin: ... absolutely. There just wasn't much available and prices were skyrocketing. We have a very different market now. 

Shawn Wentworth: 100%. 2021 was incredible. Like we just, you could barely breathe. You were just running from deal to deal to deal, and it was not so easy. It's like, oh yeah- 

Ryan Berlin: [laughs] 

Ryan Wyse: [laughs] 

Shawn Wentworth: ... you have, you have, you have a listing, it's got four bedrooms? I'll take it. Like, do you wanna see it first? But no, it was a crazy market. And now it's, now it's a grind. Now it's a bit more of a grind in trying to get out there and get more information to people, and- 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: Yeah, a lot of undecided people out there. 

Ryan Berlin: Yeah, I mean, the dynamics across the board are different because interest rates also back then, the reason people were- were happy to take homes off of you without looking at them is that they were borrowing at sub 2%, and obviously now that context is quite different. We'll talk about the market today. There's a few things we wanna cover. In addition to the- the state of the housing market in- in Metro Vancouver and, uh, along the Sea to Sky corridor, we'll talk about what's driving action or the lack thereof. We'll review the latest Bank of Canada interest rate decision and what we think they should do with rates 'cause they're listening. 

Shawn Wentworth: [laughs] 

Ryan Berlin: I bet you they're listening 

Shawn Wentworth: I hope so. I hope so. They don't seem to listen to too many people. 

Ryan Berlin: They sh- I- they should listen. 

Shawn Wentworth: I hope they're listening to you guys. 

Ryan Berlin: And then we wanna share some thoughts on the new first-time buyer GST rebate that's been introduced by Prime Minister Carney et al. Let's get the ball rolling here. So as we touched on, the market is a lot slower now. We've been talking about this for months. Ryan Wyse, why don't you sort of set the stage for us and give us some context for, you know, why we're saying the market is slow right now? 

Ryan Wyse: We've kinda chatted about this in past months, but really, we've seen a big slowdown since the start of February or perhaps January 20th when, uh, someone was, uh, inaugurated down south. So the market had picked up. We l- last year, you know, October, November, December, January, we saw all four of those months year over year sales increases. And then February hit, tariff talk really hit, all the threats, some of the implementation pullback, everything else, and consumers just pulled back. There, like you said, Shaun, there's so much indecision out there right now. And so the sales have been really depressed for February, March, April, and now May. So last month, sales were down almost 20% year over year, 34% below average. You know, there was a small month-to-month increase in sales, which is kinda typical between April and May, but really the story is that, once again, it's just another month of buyers kinda sitting on the sidelines. It is a consumer confidence issue. Consumer confidence is lower today per the Conference Board of Canada than in March of 2020 when COVID first hit. And so we've got all these buyers kind of on the sidelines. We've got new listings keep coming to market. We've just had three consecutive months of more than 10,000 new listings. And so inventory is really accumulating. We're up over 25,000 listings- 

Ryan Berlin: Hmm 

Ryan Wyse: ... the highest of any month since September 2012. 

Shawn Wentworth: It's wild. 

Ryan Wyse: Yeah, and so, like, it's just been this, again, the inventory is really accumulating month after month as there's- there's lots of listings, there's not a lot of buyers, and- and the market's kinda just stuck a little bit. So I don't know if that kinda tracks with what you're seeing out there, Shawn. 

Shawn Wentworth: Absolutely. We're seeing that same thing. Lot of indecision, uh, lot of uncertainty, people coming up... We're still getting showings, like there's definitely still buyers out there, you know, but they're coming to houses three, four, or five times and still asking the same questions. And it's, they're just very uncertain. They're- 

Ryan Wyse: Hmm 

Shawn Wentworth: ... they're confused what's gonna happen. Is there gonna be a tweet in the middle of the night that's gonna crash the market? Is there gonna be, you know, something new that's gonna be released by our own government? We just, there's just so much uncertainty out there that people are definitely a little gun shy. 

Ryan Wyse: Yeah. 

Ryan Berlin: So when you say that people are, uh, you're getting the traffic at the open houses, there are showings, but people are coming back with questions. Is it about, hey, yeah, when will all of this change? Or is any of it about the property? 

Shawn Wentworth: From what we've seen, from what I've seen anyways, it's more about them just m-... wanting to talk and ask questions- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... to justify why they're waiting. I don't think they're questioning the house or the product. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: They're just, because there's still so much uncertainty in, are the rates gonna come down? Is there gonna be, you know, unemployment gonna skyrocket? Like, what's gonna happen? So they're, they're waiting for the other shoe to drop, and while they're waiting, they're just asking questions to fill time. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: Um, 'cause we've seen people come back and say clearly this is... You know, a couple of times they're just gonna be like, "This is my favorite house. I love this house." I'm like- 

Ryan Berlin: Right 

Shawn Wentworth: ... normally you write an offer when you say something like that. But then they'll book another showing and come back another week, and then they disappear for three or four weeks and they're just, "Is it the right house? Are we making a mistake?" There isn't, there's no urgency. Right? 

Ryan Berlin: There's no urgency, yeah. 

Shawn Wentworth: There's no pressure from other buyers and they've got the time, and if they're not, if they don't have a motivation of a deadline of some sort- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... they are taking their time. 

Ryan Berlin: And these are buyers, I presume, who are qualified, who can afford the homes that they're looking at, who presumably have a down payment or access to one, or have some equity that they're bringing with them? 

Shawn Wentworth: Absolutely, yeah. For the most part we've seen they're all pre-qualified, we're getting a lot of information from them, they've talked to their bank, talked to their mortgage brokers. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: We're talking to their banks, we're talking to their mortgage brokers to make sure, 'cause you don't wanna waste your time if someone's coming in and they're- they're not pre-approved. Um, but definitely, they've got the money or they're getting money from family. I've seen a lot of young people who are lately getting lots of money from parents to buy places, which has really shocked me in this market. 

Ryan Berlin: No doubt. The assets that they're drawing from are in some ways under assault, right? 

Shawn Wentworth: Absolutely. 

Ryan Berlin: Whether it's in pure financial markets or you look at the housing market where values have been fairly stagnant and there's questions about the trajectory, uh, of values. 

Ryan Wyse: Are they also looking at prices and wondering if, you know, if they wait they might get a lower price? Like, we've been talking a lot about how- 

Ryan Berlin: Mm-hmm 

Ryan Wyse: ... prices have really held up. They've been pretty flat for the last couple of years, and I think there's probably some sentiment out there that given conditions, maybe prices, they're expecting them to come down, they're waiting for that. 

Shawn Wentworth: Yeah, I'd say from what I've seen, uh, probably 25% of the buyers think there's gonna be a crash. 

Ryan Wyse: Mm-hmm. 

Shawn Wentworth: They think the numbers are gonna come down significantly, and they're waiting to see if that's gonna happen. And then there's probably another 25% that are expecting the rates to come down a little bit more so it might be more affordable for them if they can get the rate a little bit lower. But it's just a lot of indecision- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... more than anything else. Just indecision, taking their time, no urgency. 

Ryan Berlin: Yeah, no urgency, I think that is the key right now. There's the uncertainty and a lack of urgency and, on the buyers part, but then also on the sellers. So this is a question I have for you as somebody who is, you are working with clients, you're- you're a boots on the ground guy, whereas we're, you know, we sit behind computers and- 

Ryan Wyse: [laughs] 

Ryan Berlin: ... or microphones and talk to people like you. You know, with 25,000 homes available for purchase in this region, we're talking from condos to detached homes- 

Shawn Wentworth: Definitely 

Ryan Berlin: ... you know, from Pemberton through to, uh, to Langley, it's a lot, but we're not seeing prices move very much. They're fairly rigid. And I'm guessing that you're also just not seeing a ton of urgency on the sell side as well. 

Shawn Wentworth: Some sellers they, they've just sat for so long, they're just, they're willing to wait. They've got their number in their head. 

Ryan Berlin: Right. 

Shawn Wentworth: Some of the guys that are sitting on new product, like guys that built spec houses- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... those guys are a little bit more motivated, but a lot of those guys are also looking at renting their places out right now, so there's a little bit of cashflow to carry the property. 

Ryan Berlin: Right. 

Shawn Wentworth: 'Cause there, there just doesn't seem to be that urgency. Our prices have held fairly steady up in the corridor. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: I think everything's up a little bit overall this year- 

Ryan Berlin: Yeah. 

Ryan Wyse: Yeah. 

Shawn Wentworth: All of our numbers right now. And our list of inventory has increased probably about 20% in Squamish. But you go on to their sales report and we're seeing sales every single month. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: And they're similar to the amount of new listings, but we have slowly been creeping up the last four or five months. 

Ryan Berlin: Yeah. 

Shawn Wentworth: But I think we're at 279, 278, somewhere in there right now, and I think we started the year like 225. 

Ryan Berlin: Right. 

Shawn Wentworth: So we're, we've creeped up a bit, but it's, it's not crazy. It's not flooding. 

Ryan Berlin: It's slow. 

Shawn Wentworth: Yeah. 

Ryan Wyse: So that's something I've noticed. If you look at the whole Sea to Sky corridor, you take Squamish, Whistler, Pemberton combined, tracking a lot closer to 2024 than the broader region. Sales counts are at like 3% up on last year. Inventory is only 4% up on last year. And it's kind of similar, we're seeing like in Victoria and Kelowna, some of these, like, secondary, more end-user driven markets seem to be holding up a little better- 

Shawn Wentworth: Yeah 

Ryan Wyse: ... than sort of Metro Vancouver as a whole. 

Shawn Wentworth: Yeah. One of the things for listings that's kind of a bit deceiving too is a lot of the developers have started to put some of their listings on- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... and they normally don't. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: So we're seeing a little bit of an increase in our volume, which isn't really an increase. It's just an increase in what's visible, just because developers are sitting on product that's not selling. 

Ryan Berlin: Is that completed and unsold product in Squamish if you go north? 

Shawn Wentworth: Completed and unsold, but also stuff like pre-sales. 

Ryan Berlin: Yeah. 

Shawn Wentworth: We're even seeing them list some of their pre-sales, which they would normally, they didn't do in the past. They would just sell out of their show home- 

Ryan Berlin: Yeah 

Shawn Wentworth: ... they'd tell all the realtors and they would just, kept it complete control of the pricing and the information that was out there, but now they're actually posting them. 

Ryan Berlin: And so they're valuing that visibility. 

Shawn Wentworth: Definitely valuing the visibility. They're, they're looking for anything to get traction- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... to get more eyes on, on their product 'cause there's not a lot of people walking into the show homes. 

Ryan Berlin: We typically call it the pre-sale market because we're talking about homes that s- sell before they're built, but increasingly we are seeing this trend to, uh, towards new homes that have been built. Enough were sold in the building to, to trigger the financing, so we, you know, we see that the, the building's going up, but there are increasingly more homes available that are completed and empty. So we're, we're talking about calling it the, the new home market- 

Ryan Wyse: Mm-hmm 

Ryan Berlin: ... as opposed to pre-sale- 

Ryan Wyse: Yeah 

Ryan Berlin: ... probably more representative in this market. But Ry, what are you seeing in, in that new home market today? 

Ryan Wyse: So it's quarterly data, so Q1 we just had just over 1,400 sales for the region, which is half as much as Q1 2024. Again, this is all consumer confidence, investors being sidelined, this is really, really low. And so that's the fewest-... new home pre-sales, whatever you wanna call it, transactions. In any quarter, as far back as our data set goes, which is to 2012, there's just been even more of a drop-off in the new home market than the resell market. Obviously, again, it, it's investors pulling back. It's just that lack of certainty about where the market's going to be in three to five years. And so we're seeing this growth now of completed and unsold condos as so many of these projects that sold in 2021, that started building in 2023 are now being delivered and s- you know, some units either didn't sell or got held back. And now they're kind of completing into a market where there's not a ton of absorption. And so as of the end of Q1, we have it at just over 2,500 completed and unsold condos, just condos, which is the most we've seen in a decade. And we expect there's another 2,300 unsold homes that will complete this year. So depending on how absorption looks, we could be, you know, I think we're forecasting around 3,700 by the end of this year, uh, if, if we kind of stay on the similar pace of absorption that we're at right now. 

Ryan Berlin: Yeah, so those numbers- 

Shawn Wentworth: Mm-hmm 

Ryan Berlin: ... like in a historical sense, those are large numbers, but it also, I mean, you touched on it and we, during the intro here, we talked about it. We're talking about a record number of housing completions that we're seeing now because it is that wave of homes that sold or pre-sold in 2021. I would say, you know, all else being equal, we should expect an uptick in that completed and unsold inventory. But to your point, Ry, we are expecting that to continue to rise. For all of us who work in the industry, uh, we're very, [laughs] we're very sensitive to interest rate decisions, the language around them from the Bank of Canada, and we care deeply about where interest rates are and, and where they're going. So the Bank of Canada met at the beginning of June, June 4th, and I think at that meeting decided to hold their trendsetting rate at 2.75%. So for context, that is right in the middle of their desired range, their neutral range where they see monetary policy not having an expansionary effect or a restrictive one. So that range goes from 2.25 to 3.25. So it's right in the middle, so... And obviously way down from 5%, you know, a year and a half ago. You know, as part of their release when they made the announcement, the bank said that uncertainty about tariffs, US tariffs remains high. The Canadian economy is softer, but not sharply weaker, I would say yet. Core inflation measures are currently a little unexpectedly firm, even though headline inflation came down and Ry will talk about that in a, in a sec. So for the bank, the economy is sending mixed messages. They're finding it very, very difficult to forecast under these conditions because we don't have all the information we need as it relates to US economic and trade and tariff policy. So they chose to stand pat. What are some of your thoughts, Ry, on that decision in light of the data that we do have? 

Ryan Wyse: I don't think it's, it was a big surprise. I think consensus was they would hold. I think I'm on record on TikTok as saying- 

Ryan Berlin: [laughs] 

Ryan Wyse: ... that they would hold but they should have cut. So my perspective, inflation overall at 1.7 is in check. Yes, core measures have creeped up over 3%, but we get this buffer for the next 12 months of the removal of the consumer carbon tax means- 

Ryan Berlin: Mm-hmm 

Ryan Wyse: ... inflation will be about half a percent lower than it otherwise would have been for the next 12 months because of the math. So there's a bit of room there for them. The domestic economy, pretty weak. I don't see a lot of demand side factors pushing up inflation. And the labor market relatively weak. We've been talking about how it's kind of just been getting a little bit weaker every month for the last two years. It's like a fr- a boiling- a frog in a boiling pot of water. There hasn't been, you know, a big spike in unemployment or the unemployment rates. There hasn't been like mass layoffs across the country. It's just been sort of a weakening of the labor market, and that's- 

Ryan Berlin: Mm-hmm 

Ryan Wyse: ... continued right into May where the unemployment rate hit 7% for the first time since 2021. If you exclude COVID- 

Ryan Berlin: Mm-hmm 

Ryan Wyse: ... uh, it's the highest since 2016. Tariffs now are, other than sort of steel and aluminum and the auto sector, are much more restricted. CUSMA compliance is way up on our exports. And so overall I don't expect a ton of price pressures, and kind of all of that is to say that I think they should have cut and I think they should cut in July because I think we're gonna get a few more data releases showing a little bit more weakening. I think the time really is to cut. 

Ryan Berlin: We've talked about this before, but the bank was slow to respond to the price pressures during the pandemic, and inflation really ran away on them, right? Peaked at 8.1% in the summer of 2022. It seems like o- in some ways a distant memory, but it wasn't that long ago, right? 

Ryan Wyse: Yeah. 

Ryan Berlin: I mean, it was, there was... we were on the verge of panic. Inflation though is largely in check now, but I think the bank is really hesitant to be too supportive in their approach to managing inflation specifically. It makes sense, like as you said, Ry, the, the consensus was they weren't going to cut and there's no talk of an increase right now. When you do look at some of those underlying economic metrics and, and features, those numbers have been weak for a couple of years now. 

Ryan Wyse: Mm-hmm. 

Ryan Berlin: Right? So the hope is that rate cuts are on the horizon. When we have the data six months from now, we look back and we say, "Oh, we are in recession right now." Right? You know, and the bank's looking at all the... and we're just... look, we're just three schmos here- 

Ryan Wyse: [laughs] 

Ryan Berlin: ... sitting around with microphones, but they've got reams of PhD level analysts who are aware of these things. So it'll be interesting to see how we progress through the year. 

Shawn Wentworth: I think they missed the boat. I think they should have cut. From this industry, I'm looking at what all the developers are doing, and all the developers seem to be pushing off their, their launches. Like there's a lot of big projects up in the corridor that have just paused. One's paused to 2027 now. Another one's paused to the fall. Lots of people are just taking a step back 'cause there's just... there's too much uncertainty. And for them to hold the rates, I don't think they're seeing a-... what's happening, 'cause I know a lot of the trades, especially in the construction, they're all looking at like, "Okay, where's the next project coming?" 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: They don't know what their next job's gonna be. You actually get guys submitting quotes now, where before you just, "Hey, can you start Thursday?" "Yep." And they just start and they bill you. But now it's, there's, there's more availability of that, and I think that's gonna be something that really trickles down, especially into the fall if they don't see any, some big changes over the summer here. 

Ryan Berlin: The decision to build is, is preempted by the ability to sell, or pre-sell, right? 

Shawn Wentworth: Yeah. Absolutely. 

Ryan Berlin: So, or, or not preempted, preceded by. So we know since that sort of apex of 27,000 pre-sales in 2021, which is now manifesting as record levels of completions, the number of pre-sales have come off in each of the three years since. The last 10 years, I think the average is about 15,000 to 16,000 pre-sales- 

Shawn Wentworth: Mm-hmm 

Ryan Berlin: ... and we were at, last year, sub 10,000. Sub 10. It was, yeah, just under 10,000. 

Shawn Wentworth: Really? How so? 

Ryan Berlin: And we're, I mean, we're on pace for half that this year. So you look at it and we know construction levels are going to come down. So we, we are gonna find ourselves- And they've started too. So 2023 was a record year for starts. Mm-hmm. Came off in 2024. Year over year through four months this year, they're down 25%. Yeah. So if we just carried on at this 25% level, that'd be the fewest starts in a decade. For this year. Yeah. Right? And then we're talking about next year's construction and the year after reflecting more recent pre-sale counts- Yeah ... which were lower than what is driving construction today. Yeah. 

Shawn Wentworth: Absolutely. Absolutely. I think another thing that I've seen with a lot of the guys in construction is, you know, two years ago, they couldn't find a laborer to sweep the floor. 

Ryan Berlin: Mm-hmm. 

Shawn Wentworth: Now they put an ad and they've got 20 guys applying. 

Ryan Berlin: Right. Yeah. 

Shawn Wentworth: Right? Like, there's- 

Ryan Berlin: That makes sense 

Shawn Wentworth: ... people applying. Like- 

Ryan Berlin: Yeah 

Shawn Wentworth: ... two, you know, two, three years ago, it's like, "Okay, we'll start, but it's gonna be at this rate." 

Ryan Berlin: Yeah. 

Shawn Wentworth: This is how high we want. This is what we expect. And I'm not doing this, this, and this." Like, they were dictating to you what their terms are gonna be to be hired. And now you've got, you've got guys to pick from. 

Ryan Berlin: Yeah. 

Shawn Wentworth: Which is a completely different model than where we were. 

Ryan Berlin: Yeah. And, you know, a too tight market, whether it's the labor market or the housing market or whatever, brings with it its own set of problems. 

Shawn Wentworth: Mm-hmm. 

Ryan Berlin: Balance is generally good, but the pendulum seems to have swung. And it goes back to the uncertainty, the lack of urgency, buyers on the sidelines ready to buy. So I think there, that's something to think about as you look forward is we have buyers who financially are prepared to transact. 

Shawn Wentworth: Mm-hmm. 

Ryan Berlin: But there's a mental/emotional hurdle to get over. So- 

Shawn Wentworth: Definitely 

Ryan Berlin: ... we know that those people are here. So when you look ahead and you say there's gonna be fewer homes completing going forward, the demand is still there- 

Shawn Wentworth: Mm-hmm 

Ryan Berlin: .. pent up perhaps now. So we're looking at this, this window. I think what we're seeing right now in our market, the way it looks, the shape of it, all of that, is a somewhat fleeting phenomenon, because I think it's gonna look very different a year and two years from now. 

Shawn Wentworth: Absolutely. I think the longer this goes where we're at now, even with our current interest rates, like the current interest rates are actually fantastic if you look at the past 25, 30 years. 

Ryan Berlin: They're really not bad at all. They're- [laughs] 

Shawn Wentworth: They're actually not bad, but people are so used to this one and 1.5, 2% mortgage rates. Now they're like, "Okay, well, let's wait until it comes back down." But they have the assumption that it's gonna go back to 2% - 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... and the longer this goes and people finally realize it's not going to 2%, we'll see them coming back. 'Cause they're, they're out there. We're still getting calls for showings. Like- 

Ryan Berlin: Yeah 

Shawn Wentworth: ... there's lots of buyers still. 

Ryan Berlin: It's like a be careful what you wish for thing. If we were to see sub 2% rates to come back, something very bad has transpired. 

Shawn Wentworth: Yeah. Yeah. 

Ryan Berlin:Right? The, the only reason we saw those in 2021 was we had this once in a 100-year phenomenon which was a pandemic and it was a unique response. And who's to say we would respond the same way, you know, next time as we did last time? So that aside, you know, you'd, you'd see rates as low as that when the economy really, really needs a nudge, right? 

Shawn Wentworth: Yeah. 

Ryan Berlin: So we're probably talking about a situation where you have more people who are unemployed. President Greg Zayadi says that we're not getting yesterday back. 

Shawn Wentworth: Yeah. 

Ryan Berlin: And I think that's a good example of it. We're never gonna see 27,000 pre-sales, 72,000 resales, or sub two, 2% five-year fixed mortgage rates going forward. So we need to detach from that particular context and just be prepared for the future to look more like it does now. You know, we have a new federal government. They've talked about injecting some life into the market, both on the construction side, financing side, but also to get more first-time home buyers in. 

Shawn Wentworth: Mm-hmm. 

Ryan Berlin: So they have introduced the first-time home buyer's GST exemption as of May 27th. So as of that date, home buyers, if you, if you've written a contract, like a, a pre-sale contract or a contract to take possession and occupy the unit, from that date onward, you're exempt from paying GST on the purchase price of those newly built homes up to a million dollars. And then between one and $1.5 million, the rebate is linearly phased out. So when you're at $1.5 million, no rebate. I think we all like the idea of it. Any thoughts on maybe the efficacy or the scope?... of this program. 

Ryan Wyse: I think it's a good idea, generally speaking. I think anytime you set a price cap, you need to index it. So if you say, "Oh, yeah, we don't want to include luxury homes, we're gonna set a cap of $1.5 million," that number becomes less and less effective over time. So what you want to do is index it either to inflation or to benchmark prices or something- 

Ryan Berlin: Right 

Ryan Wyse: ... like that. So there was an old GST rebate that basically became useless because it was introduced in- 

Ryan Berlin: Absolutely 

Ryan Wyse: ... 1991 at 1991 prices. And so, like, I had to look up the terms of it because it was so out of date. But in 1991, there was a cap of $350,000 and then a linear phase-out to $450,000. So in 1991, you could buy a brand new detached home and get a GST rebate. And in 2024, only a handful of condos, most of them outside of this market- 

Ryan Berlin: Yeah 

Ryan Wyse: ... were eligible, and it was a smaller one, so it was up to 36% of your GST, not all of the GST like this one. Um- 

Ryan Berlin: So the maximum, I mean, the maximum rebate there was, was, uh- 

Ryan Wyse: Like six grand 

Ryan Berlin: ... six grand. 

Ryan Wyse: Yeah. 

Ryan Berlin: 6,000 bucks. 

Ryan Wyse: But, uh, the point is, like, it applied to almost the entire market- 

Ryan Berlin: It did 

Ryan Wyse: ... at that time. 

Ryan Berlin: Yeah. 

Ryan Wyse: And then because they never changed the cap, it became less and less effective every single year to the point where it was not effective at all. 

Ryan Berlin: Yeah, you ran some numbers, and, you know, essentially almost nothing is transacting under $350,000 as far as new homes are concerned. 

Ryan Wyse:In this market, yeah. 

Ryan Berlin:In this market. It's, you know, one-fifth of 1% by your calculations, right? 

Ryan Wyse:Mm-hmm. 

Ryan Berlin: This policy originates with the federal government, so it applies nationally. There's no texture to it going east to west, north to south, right? 

Ryan Wyse: Yeah. 

Ryan Berlin: So very different markets. If you look nationally at the average home price, so it's just, this is, like, ve- a very crude measure 'cause it's across all, all types and all markets. The home prices tripled between 1991 and where we are today, and in Metro Vancouver, they quadrupled. 

Ryan Wyse: Wow. And this is now, the new cap has tripled the old one, effectively. 

Ryan Berlin: It has. 

Ryan Wyse: 350 to a million. 

Ryan Berlin: Yeah, right. You can argue that that kind of moved in line with what we saw nationally. But to your point, Ry, indexing this so that there is movement year to year. 

Ryan Wyse: Mm-hmm. 

Ryan Berlin: And I would suggest too that you, you, you put this in place and it can go in both directions. It can go down, it can go up- 

Ryan Wyse: For sure 

Ryan Berlin: ... depending on what values are doing. How effective it will be in driving demand is up for debate. If we look at our pre-sell data, obviously we represent, you know, dozens of developers who are building all types of homes, wood frame, concrete, townhomes across Metro Vancouver. 20% of our buyers over the past 24 months were end user, first-time buyers- 

Ryan Wyse: Yeah, which is an important- 

Ryan Berlin: ... who bought under a million dollars 

Ryan Wyse: ... caveat because it doesn't apply to anyone who's, uh, buying for investment purposes. 

Ryan Berlin: That's right. 

Ryan Wyse: Yeah. 

Ryan Berlin: That's right. So 20% of our buyers under a million, end user, first-time home buyers. So they're exposed to kind of the maximum rebate under this program. The Conservatives, part of their platform had proposed a full exemption from GST up to $1.3 million for any buyer of new homes. If you're really looking to kickstart a market, if that's what it's about, if it's about trying to get people into homes that they're going to live in, raise a family in, or use it to then have a family and move up, the argument for a broader application of the exemption is very easy to make. 'Cause 80% of our sales over the past 24 months were under a million dollars, so for all types of buyers. For buyers under one and a half million, if we were looking at little north of the 1.3 the Conservatives proposed, the end, the cap here for the current program, that's 95% of our buyers. You know, the new federal government's doing a lot very quickly. My hope is that we can add some nuance to this type of a policy going forward to make it really work for Canadians across all markets. 

Shawn Wentworth: It's, it's confusing in the way it was rolled out. 

Ryan Berlin: Mm-hmm, mm-hmm. 

Shawn Wentworth: I mean, everybody's like, "Oh, it's up to a million five." Well, it is, but it's that linear- 

Ryan Berlin: Then it goes to zero after one five. 

Shawn Wentworth: ... you know, it goes to zero all of a sudden when you get up there, and it's, it's not $50,000. Like, at a million it's $50,000 rebate, but at a million one it's not $50,000, it's, it just goes backwards. 

Ryan Berlin: Yeah. 

Shawn Wentworth: And so I think the way it was rolled out was a little confusing for sure. 

Ryan Berlin: Agreed. 

Shawn Wentworth: A lot of people originally came out like, "Oh, this is gonna be great." And then they're like, "Wait a minute, this doesn't really work." 

Ryan Berlin: So are you seeing, though... Because obviously at these price points when we're looking at the sea to sky market, at least on the multifamily side would be less than one and a half million. Have you seen any in- kind of increased traffic to sites or buyers in general saying, "Hey, I'm feeling like maybe my purchasing power is a bit expanded here because of this program." Like it's, it is breathing some life into the market, or...? 

Shawn Wentworth: I haven't seen anything, to be honest. 

Ryan Berlin: All right, okay. 

Shawn Wentworth: Uh, we haven't seen anything. We've heard talk from other realtors, we've heard talk in the community of it, you know, it's gonna be stimulating. But actual boots on the ground, we're not seeing it. 

Ryan Berlin: Yeah. 

Shawn Wentworth: There's still just so much uncertainty with everything else that the first-time home buyers are gonna be, you know, even more hesitant, 'cause they're the ones whose jobs are gonna be on the line. 

Ryan Berlin: I think that's a great point, actually. 

Ryan Wyse: Yeah. 

Ryan Berlin: Just 'cause I think this is... I think in a more normally functioning market, this policy can be, you know, uh, achieve a certain level of effectiveness. It's not enough right now to get people over that hump of being concerned about their own job six, 12 months from now, or the risk that rates might go up, or being concerned that they won't go down enough for their liking. We don't know what's going to transpire in the near and medium term as it relates to the extent of our trade with the US, our relationship there. Yeah, I think until some of that stuff is cleared up, it probably starts with [laughs] the relationship with the US and everything else kind of falls in line, we're not gonna see a big impact from a policy like this. 

Shawn Wentworth: Just a little side note. Is there a realistic chance that we're gonna see any stability in the next three and a half years from our relationship with the US? It can change literally with a tweet in the middle of the night. 

Ryan Wyse: So the thing is everyone agrees, or almost everyone agrees, that they're gonna drive to a new trade deal. So CUSMA expires soon, we're gonna do a new trade deal. But if you don't honor the last trade deal, who's to say you're going to honor the new trade deal? 

Ryan Berlin: Well, that's it. 

Shawn Wentworth: Yeah. 

Ryan Wyse: So I think there will always be a heightened level of uncertainty. 

Ryan Berlin: Mm-hmm. 

Ryan Wyse: And especially for us as Canadians, our sovereignty's been threatened, and w- there's been a huge response across the country. So I think it's a case of, you know, once bitten, twice shy, for sure, in terms of how Canadians respond to this current US administration. 

Ryan Berlin: Absolutely. I mean, until w-... Congress in the US steps up. I mean, I don't know where they've been for the past four months, but everything's in executive order now. As long as that's the playbook- 

Ryan Berlin: ... then we're not gonna feel very secure and things won't feel stable. We can cross our fingers though, right? 

 Shawn Wentworth: Here's hoping. 

Ryan Berlin: Here's hoping. 

Shawn Wentworth: Just hoping for some calmness. 

Ryan Wyse: There's a lot we can do at home though, so if we focus on ourselves and, uh- 

Ryan Berlin: Absolutely. Absolutely there is. 

Ryan Wyse: Definitely. 

Ryan Berlin: Yeah. Okay, so next up, our Beneath the Headline segment where we find a headline from the past month that, to put it gently, could use a little additional context. You found an interesting one, Ry. 

Ryan Wyse: Yeah, so we already talked a bit about the labor market. So the one I found is that Canadian unemployment soars- 

Ryan Berlin: Hmm 

Ryan Wyse: ... driven by immigration more than tariffs. So, you know, we already said it's been sort of a slow and steady increase in unemployment and the unemployment rate for the better part of two years. This article has this, mm, clickbaity headline and then the first thing they mention is the unemployment rate increased from 6.9% to 7% last month, which again, I think, you know, it's not that unemployment is soaring, it's that it keeps getting a little bit worse every month. It's still something to be concerned about and there is some merit to this idea that immigration is part of it because for the last couple of years, our population has grown a lot faster than our labor force can accommodate. That has slowed down as well quite a bit and so I think now we're seeing is, you know, it's a, it's a weakening labor market, but I think it's one where the headline doesn't do the labor force data a release justice. 

Ryan Berlin: Or maybe they were asleep for two years and- 

Ryan Wyse: [laughs] 

Ryan Berlin

... they just woke up. They thought we were at, you know, 4.2 and we're at seven. [instrumental music] 

Ryan Berlin: We have a question from a listener, Imani in Vancouver. 

Listener Question: Hey, Ryan and Ryan. This is Imani from Vancouver. I'm really enjoying your content, but I'm curious about your thoughts on housing being so out of reach for so many of us. Do you think policy makers should be focused more on pushing prices down or building more affordable housing options? 

Ryan Wyse: So there's a few things I think. First of all, I know there's been a lot of talk about this. Our new Housing Minister kind of made this comment, and there's been a lot of people kind of chime in on whether or not prices should come down and I think ultimately policy makers shouldn't be focused on price, but more on creating the conditions to allow for more supply. Ultimately, I think what we need is far more housing supply. And so I think creating the conditions to allow for that is really all, what all levels of government should sort of be focused on. In theory, you can get better affordability without prices coming down if incomes are rising quickly enough, if interest rates come down. Prices have held up. They ran up so much and they have held up that affordability is much worse today than it was in say, 2020, 2021. That's absolutely true, but I think for policy makers it's much more about creating the conditions for more supply. 

Ryan Berlin: Two thirds of the electorate is a homeowner, right? So I think there's a political reality there that is not tenable. I agree with you, Ry, prices are an intersection of a whole load of things that are happening on the supply side f- for any market, including that of housing and on the demand side. You know, the provincial government here has done some things to try to induce new supply, w- we have housing targets, we have the TOA legislation that looks to increase density around transit, we have the small scale multi-unit housing policy- 

Ryan Wyse: Mm-hmm 

Ryan Berlin:... which looks to bring density to single family neighborhoods. We said at the beginning like none of those on their own were gonna s- 

Ryan Wyse: Mm-hmm 

Ryan Berlin: ... solve the supply issue, the long-term supply issue, but it's opening up doors for new supply that, that didn't exist before. 

Ryan Wyse: Yeah. 

Ryan Berlin: And I think also looking at, to your point, increasing incomes, productivity, how do you create incentives for businesses to invest in capital and technology, increase that productivity which will translate to increased wages. 

Ryan Wyse:And there is a push from the new federal government to increase productivity and construction, so whether it's prefab modular- 

Ryan Berlin:Mm-hmm 

Ryan Wyse: ... mass timber. So I think these are some good initiatives. I think there's a lot of opportunity there. And generally, to your point about creating productivity and increasing incomes is a great way to improve affordability across the board. 

Shawn Wentworth: I want the policy makers just to get out of it. They're in the way. Uh, there's so much red tape, there's so many different things like- Just in the last four or five years, there's been so many different things added to the be- building code, things being fire compliant- 

Ryan Berlin: Yeah 

Shawn Wentworth: ... and this compliance and something else compliant. The amount of things they've added have just pushed the prices up. 

Ryan Berlin: Yep. 

Shawn Wentworth: And then some great policy decisions, let's try and get, you know, smaller houses or get multi-houses on a smaller lot, but how is that rolled out? You still can't get an answer from the District of Squamish on how to do a fourplex on a single family. 

Ryan Berlin: Hmm. 

Shawn Wentworth: They're still trying to put you into a different building code. 

Ryan Berlin: So are you not seeing much of that type of development? 

Shawn Wentworth: We're seeing it. We're seeing people apply for it. We're seeing applications in, we're seeing a couple have actually started building, but then we've seen other ones where they've started and the neighbors have sued them, and now they're nine months in court trying to figure out... And they're saying, "Well, no, you've gone against the, something that was registered on title." So the, the policy was a great idea- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... but it wasn't followed through with proper knowledge for every single market. They did a blanket thing across the whole province basically and- 

Ryan Berlin: Mm-hmm 

Shawn Wentworth: ... it works in one neighborhood, but it doesn't work in another neighborhood- 

Ryan Berlin: Yeah 

Shawn Wentworth: ... but there's no way to distinguish it. So everybody's running around in circles and yeah, just too much red tape. Just get it out of the way. I've never seen the government do anything successfully. 

Ryan Berlin: [laughs] 

Shawn Wentworth: Okay? So in my opinion, they need to stay out of the way and let business do it. There's gotta be guidelines. You can't have developers running crazy. I get that. But you can't have somebody telling somebody else how to do something that's never done it before. 

Ryan Berlin: Yeah. 

Shawn Wentworth: It just leads to more chaos- 

Ryan Berlin: I agree 

Shawn Wentworth: ... in my opinion. 

Ryan Berlin: Well, no, you know, and I think you make a good point too because our model for adding housing supply, we have housing that is a quasi public good that's we, we, we lean on the private sector to develop. So that's how it, things operate here and I think for the better, but where we've gotten into trouble to your point is layers of red tape regulations- 

Ryan Wyse: And fees 

Ryan Berlin: ... fees, taxes- 

Ryan Wyse: Yeah 

Ryan Berlin: ... which just really increase that cost of delivery. Timelines are extended and I think-... when you look at all of this too, it's how do you create a sort of a quilt of policies- 

Shawn Wentworth: Mm-hmm 

Ryan Berlin: ... that sort of nest from the federal through the provincial to the regional or municipal levels, that are conducive to bringing new supply to the market all the time? Because we see development happen in fits and starts. 

Shawn Wentworth: Mm-hmm. 

Ryan Berlin: And so we get kind of yanked back and forth where we- when we- we just- we opened today by saying, "Hey, we have 6,000 homes available in resale inventory just a few years ago." That's up to 25,000. And I'm not saying policy should have changed to 6,000 or should change to 25,000, but we had record pre-sales a few years ago, record construction. Now, we know that's gonna fall off. So we're just going through these waves. Instead of reacting to a feature of the market that we don't like and implementing a policy to, you know, hopefully address that, it's stepping back and saying, "How do we just broadly create conditions for the continued sale and develop- of new housing?" 

Shawn Wentworth: I'd love to see the levels of government all get together and figure out how to work together to figure out how to implement stuff that makes it more affordable for us. Instead of reacting politically to something- 

Ryan Berlin:Mm-hmm 

Shawn Wentworth: ... and then putting a policy on it because it's- you're reacting to a political issue, let's come up with a policy that makes sense to drive us forward. How do we get to a point where we can work together with all different levels of government to make things run smoother instead of, like, well, how do you react to- they've just made a statement, and now we have to fit it into our town versus- or our municipality or our province. 

Ryan Berlin: We have had years and years and years of trying to fix this problem and that problem. And you- you know, you- you put your finger on one hole, and another hole starts leaking water. 

Shawn Wentworth: The economy has definitely shifted, and I think all of our policymakers at all levels are taking it quite seriously 'cause they know it's gonna affect them politically. There might be an opportunity now to try and figure out how to get them all together so we can be all marching in the same- same path. 

Ryan Berlin: Mm-hmm. Agreed. Well, thanks to Imani for that question. That's probably the most lively discussion... 

Shawn Wentworth: [laughs] 

Ryan Berlin: ... and response that we've offered up in response to a listener question, so thanks for that. We'd love to answer your real estate questions. You can either email us at intel@rennie.com or leave a voicemail at speakpipe.com/therenniepodcast, and we'll try to respond in our next episode. Shawn, thanks for joining us. 

Shawn Wentworth: Thank you, guys. 

Ryan Berlin: I know it's been four years. We always love having you here. 

Shawn Wentworth: Love being here. 

Ryan Berlin: Great discussion. 

Shawn Wentworth: Yeah, absolutely love being here. Hopefully, it won't be four years before I come back this time, but it was definitely a lot of fun being here, guys. 

Ryan Berlin: Great. We'll see you again soon. 

Shawn Wentworth: Perfect. Thank you. Awesome. 

Thank you for tuning into The rennie Podcast, where we share our passion for homes, housing, community, and cities. We hope that today's episode sparked the same curiosity in you that drives us every day. If you enjoyed the conversation, don't forget to subscribe and follow us on your favorite podcast platform. And if you have a moment, we'd love for you to leave a review. It helps others discover the insights, analysis, and perspective we bring from the Rennie Intelligence Division. For the latest market updates, be sure to register at rennie.com. 

Thank you for joining us on The rennie Podcast. If you'd like to learn more, all resources mentioned in the episode can be found at rennie.com/intelligence. To be the first to receive this information, register for intelligence updates.

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Thank you for tuning into The Rennie Podcast, where we share our passion for homes, housing, community, and cities. We hope that today's episode sparked the same curiosity in you that drives us every day. If you enjoyed the conversation, don't forget to subscribe and follow us on your favorite podcast platform. And if you have a moment, we'd love for you to leave a review. It helps others discover the insights, analysis, and perspective we bring from the Rennie Intelligence Division. For the latest market updates, be sure to register at rennie.com. (upbeat music)

Thank you for joining us on The Rennie Podcast. If you'd like to learn more, all resources mentioned in the episode can be found at rennie.com/intelligence. To be the first to receive this information, register for intelligence updates. (upbeat music)

The rennie podcast was created as another way of sharing our passion for homes, housing, community, and cities. We hope that this will spark the same curiosity in you that we have for everything real estate.

Our rennie intelligence team comprises our senior economist, market analysts, and business intelligence analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. 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 supports a comprehensive advisory service and forms the basis of frequent reports and public presentations, covering the Vancouver, Kelowna, Victoria, and Seattle marketplaces. Their thoughtful and objective approach embodies the core values of rennie.