Fraser Valley Market Review 2025: VARING

MARKET REVIEW 2025: Varing

FRASER VALLEY 2025: INVENTORY ROSE, PRICES SOFTENED & BUYERS CONTINUED TO HESITATE

In 2025, the Lower Mainland market experienced a reset year, and that reset appears likely to extend through 2026 and into 2027. It was not a collapse but a clear return to fundamentals: pricing discipline, higher scrutiny, and fewer speculative bets. In the Fraser Valley, the shift was most visible across land and development/investment assets, where speculation was no longer rewarded.

This was the most evident in the Fraser Valley’s land and development/investment market. Inventory climbed to decade highs and pricing eased, but demand did not rebound. Transaction velocity slowed and deals required sharper pricing, better positioning, and stronger fundamentals. In practical terms, it was a buyer’s market, where the best product still moved, but most sellers needed to adjust to the new reality.

The Market Snapshot:

The Fraser Valley Real Estate Board (FVREB) recorded 12,224 MLS® sales in 2025, down 16% vs. 2024 and 33% below the 10-year average. Surrey led activity (48%), followed by Langley (24%) and Abbotsford (16%). On the supply side, new listings reached 37,963—giving buyers more choice than at any point in roughly four decades.

Key Takeaways (What Mattered Most):

Affordability remained the headwind, even as rates eased and selection improved.
Buyer leverage increased (more options, longer decision cycles), but confidence lagged amid broader economic uncertainty.
Price discovery became the story—in particular, in land and development sites
Some experts predict that mortgage rates may rise in 2026.
Housing: quieter demand, more negotiable outcomes

Resale housing became ultra selective in 2025!

Best-in-class listings still sold (location, layout, condition, and pricing discipline mattered more than ever).
Average listings required sharper pricing and better presentation, and buyers expected inspections, conditions, and realistic timelines.
For landowners and developers, this mattered because resale pricing and absorption set the ceiling on end-product revenue. When that ceiling softens, residual land values typically need to adjust unless the site has credible, deliverable density.

Rentals: Normalization, not Weakness

The rental market tone shifted in 2025 from scarcity to normalization.

CMHC reported the average vacancy rate for purpose-built rentals across major centres rose to 3.1% in 2025.
In Vancouver, vacancy reached 3.7% (the highest since 1988), driven by record supply delivery and softer demand growth.

What this means for income property and development underwriting:

Lease-up remains achievable, but not automatic
Pro formas need more realism on absorption pace, incentives, and achievable rents
Holding income helps, but does not fix weak feasibility

Land and development: the defining Fraser Valley story

2025 Headline: Real Estate is not the Preferred Investment Vehicle!

Land values are a derivative of feasibility: what you can build, what it costs, how long approvals take, and what the finished product can realistically sell or rent for. In 2025, higher (though improving) financing costs, elevated construction costs, and more cautious end-buyer demand pushed many buyers into “it must pencil” mode. As a result, development land repriced the most, transaction volume thinned, and bid-ask spreads widened.

Where value concentrated most reliably:

Transit-aligned sites with defensible density narratives
Infill lots with realistic SSMUH outcomes and clear constraints
Sites with clean servicing and a near-term, executable path
Rates: improving math, but certainty drives action

The Bank of Canada ended 2025 holding its policy rate at 2.25% (December 10, 2025). That improved affordability math and reduced holding costs, but 2025 proved a key point: rates alone do not restart markets; certainty does. Buyers still required clarity on costs, approvals timing, and exits before leaning in.

Bottom line for 2026

This is a discipline-driven market, with sales across the Fraser Valley and the broader Lower Mainland among the slowest we’ve seen in roughly the last two decades. Deals are still happening, but the market is rewarding one thing above all: underwriting and certainty of execution.

Landowners will maximize outcomes by aligning expectations with today’s underwriting and positioning sites around clear value lanes, transit policy, realistic infill optionality, and deliverable approvals paths with known servicing. For developers and builders, the competitive advantage remains the same: conservative assumptions, tighter execution, and certainty over optimism.