BC Real Estate Outlook: Strong Economic Growth, but Tariff Uncertainty Looms

Canada’s economy finished 2024 with stronger-than-expected growth, as GDP rose at an annualized 2.6% in Q4—outpacing both forecasts and the Bank of Canada’s expectations. Consumer spending jumped 5.6%, while the housing market posted a 16.7% gain, its best performance in nearly four years, driven largely by increased resale activity. Business investment also climbed 8%, showing confidence in long-term economic stability.

For BC real estate, this signals continued buyer confidence, especially as lower interest rates throughout the second half of 2024 helped improve affordability. Many buyers who had been sidelined by higher rates re-entered the market, contributing to strong resale activity. The upward trend in home sales suggests that BC’s housing market may be shifting from a buyer’s market toward a more balanced or even seller-favored environment in 2025.

However, uncertainty remains. The threat of new U.S. tariffs—10% on Canadian energy and 25% on all other goods—could have ripple effects on the broader economy. If implemented, these tariffs may slow economic momentum, potentially affecting employment and disposable income, which could in turn impact the real estate market. While the Bank of Canada had been expected to continue easing rates, the stronger GDP report and looming tariff risks may cause policymakers to reconsider their timeline for further cuts. Currently, traders estimate a 43% chance of a rate cut on March 12, down from nearly 50% just a day earlier.

For BC buyers and sellers, this means the next few months will be crucial. If rate cuts are delayed due to economic resilience or inflation concerns, borrowing costs may not drop as quickly as anticipated. On the other hand, if the Bank of Canada proceeds with rate reductions, home affordability could improve, further fueling market activity.

Despite external economic pressures, BC’s housing market remains positioned for continued growth, especially in sought-after areas like the Tri-Cities, where demand for family-friendly homes remains strong. Buyers and sellers should stay informed about economic shifts, as both interest rate decisions and trade policies will play a key role in shaping the market in 2025.