BC housing market forecast for the second half of 2026

It's mid-2026, and the BC housing market continues to be a hot topic. As your dedicated mortgage broker in Burnaby, I'm always keeping a close eye on the trends that impact your homeownership dreams. Let's dive into what we can expect for the remainder of the year, looking at inventory, interest rates, and buyer demand.

A Mixed Bag for BC Housing

Inventory Levels and What They Mean for You

What does this mean for buyers? More choice! When there's more inventory on the market, you generally have more negotiating power and less pressure to make quick decisions. For sellers, it means pricing your home strategically and ensuring it stands out from the competition is more important than ever.

In Greater Vancouver specifically, active listings in April 2026 reached 15,241, with a median asking price of $1,188,000. While sales accelerated in April, inventory also climbed, indicating a market that's leaning towards buyers. Townhouses, however, remain a fast-moving segment, with consistent demand for that middle ground between condos and detached homes.

Interest Rates and the Stress Test

Interest rates have been a major point of discussion for a while now, and they continue to shape the mortgage landscape. Many Canadians who secured mortgages at historically low rates in 2020 and 2021 are facing renewals in 2026. The Bank of Canada has indicated that most mortgage holders renewing in 2025-2026 are likely to see payment increases. For those renewing a fixed-rate mortgage in April 2026, an average payment increase of around $622 per month (a 24% increase) was anticipated.

The mortgage stress test remains a crucial part of qualifying for a mortgage in Canada. This test ensures that you can still afford your mortgage payments if interest rates were to rise, or if your income were to decrease. While the stress test can feel like a hurdle, it's designed to protect you and the housing market from potential instability.

Here's what you need to know about navigating interest rates and the stress test:

• Free intake for me to review is key: Getting ready for a lender review helps you understand what you can realistically afford in the current rate environment.
• Explore your options: Whether you're renewing or buying, consider both fixed and variable-rate options. Each has its own advantages depending on your financial situation and risk tolerance.
• Don't wait until the last minute for renewals: If your mortgage is coming up for renewal, start exploring your options several months in advance. This gives you time to compare offers and potentially negotiate a better rate.

Buyer Demand: Pent-Up and Patient

Despite the challenges, there's a significant amount of pent-up demand in the BC housing market. Years of constrained supply and population growth have created a pool of potential buyers who are waiting for the right conditions to enter the market. Improved affordability in some markets, combined with this latent demand, could set the stage for a rebound once economic conditions stabilize and households regain confidence.

For first-time homebuyers, there are still programs and strategies that can make homeownership more accessible:

• CMHC Insurance: If your down payment is less than 20% of the home's purchase price, you'll generally need mortgage default insurance, often from CMHC. This allows you to purchase a home with a minimum down payment of 5% on the first $500,000 and 10% on the portion between $500,000 and $1 million, up to a maximum purchase price of $1.5 million.
• First-Time Home Buyer Incentive (FHSA) and RRSP Home Buyers' Plan (HBP): These programs can help you save for a down payment. The FHSA allows you to contribute up to $8,000 per year, with a lifetime limit of $40,000, and qualifying withdrawals are tax-free. The HBP allows eligible first-time homebuyers to withdraw up to $60,000 tax-free from their RRSP towards a down payment, though these funds need to be repaid. You can even use both the FHSA and HBP for the same home purchase.

Navigating BC's Property Transfer Tax

One cost that often surprises buyers is the Property Transfer Tax (PTT). This is a provincial tax you pay when property ownership changes hands in BC.

Here's a breakdown of the 2026 PTT rates:

• 1% on the first $200,000 of the property's fair market value.
• 2% on the portion between $200,001 and $2,000,000.
• 3% on the portion between $2,000,001 and $3,000,000.
• 5% on any amount over $3,000,000 for residential properties.

For example, on a $1,000,000 home, the PTT would be $18,000.

There are exemptions available, particularly for first-time homebuyers and those purchasing newly built homes. As a first-time buyer, you might qualify for a full PTT exemption on properties up to $835,000, saving you up to $17,200. A partial exemption may still apply for properties valued between $835,000 and $860,000. It's crucial to understand these exemptions and how they might apply to your situation.

Mortgage Renewals: Be Prepared

If you're among the many Canadians renewing their mortgage in 2026, it's essential to be proactive. The vast majority of borrowers are likely to see higher monthly payments. While the Bank of Canada has noted that many who qualified under the stress test during the pandemic might see smaller increases than initially tested for, payment increases of 10-20% are not uncommon.

Here are some tips for your mortgage renewal:

• Start Early: Don't wait for your lender to send you a renewal notice. Begin exploring your options three to six months before your renewal date.
• Shop Around: Your current lender might offer you a renewal rate, but it's always wise to see what other lenders are offering. As a broker, I can help you compare rates from multiple institutions.
• Consider Your Term: Think about whether a 1-year, 3-year, or 5-year term aligns best with your financial goals and your outlook on interest rates.
• **Understand the Stress Test

Related mortgage resources

• Explore my mortgage renewal options to review your renewal before signing.
• Explore my home purchase planning to plan a confident purchase.
• Read Navigating Mortgage Renewal in Burnaby: Smart Strategies to Avoid Payment Shock for a related BC mortgage perspective.