As we move into 2026, the uncertainty of the past 2 years for home sellers and home buyers has never been more prevalent. Uncertainty is the word that sums up the local market, the USA political situation, World events… Wild swings and unpredictability in all of these arenas breeds a feeling of caution. Sellers don’t want to leave money on the table and buyers don’t want to overpay.
From a Real Estate perspective, the market drivers and statistics are so ‘area specific’ that we can’t automatically expect to see those same trends repeated in all locations. Sales in Vancouver in 2025 were the lowest in 2 decades with higher inventory than they have seen in the same time frame. While inventory on the island has dropped, it’s not the lowest it has ever been and represents the seasonal drop off we experience every year.
Here are the sales for single family homes in Nanaimo for the last 10 years.
Interest rates are great for buyers with the Bank of Canada rate at 2.25 and many lenders offering 4% for 5 year mortgages. The BOC rate doesn’t affect the long term mortgage rates (they fluctuate based on the bond yield) but it does give us an overall feeling for the market. They are expected to hold with very little change throughout the year.
For buyers, if you are buying and planning to stay there for 5+ years, it’s a great time to get in. I do see many buyers holding back and then being surprised when the home they have been watching for 4 months sells or they put in an offer and it goes into ‘multiple offers’. There are buyers watching every listing and if it seems like a good deal to you… someone else is thinking the same thing.
I recently sold a brand new home – 3 bedroom home up and a legal 2 bedroom suite down – for $246/ sq ft. This is an unbelievably low price. Just try and get a builder to build you a home for that price. Yet, it took a few months to sell.
For sellers, the overall strategy hasn’t changed. You always are exchanging price for time. There is a buyer at all price points (within reason) but you may have to wait a long time to find that buyer and as we lower the price, the pool of interested buyers grows… sometimes exponentially. I have seen homes not sell for 4 months, we reduce by $15,000, and then we get multiple offers.
So what do I see for 2026 in our area?
- A slightly more balanced market than last year.
- Little or no change in the mortgage rates
- Sale prices will remain unchanged for the first quarter with very modest increases throughout the balance of the year.
- The banks are trial testing a change in their approval system which may give buyers a bit more flexibility.
- Sellers are weighing time vs money and we will see listing prices reduce.
- This year there will also be more mortgage renewals than any other time in banking history, and all at a much higher rate. Unfortunately this will result in an uptick in defaults and foreclosures but we won’t see these until late in the year or early 2027.
- New construction has slowed down for the last few years and will continue at this same rate.
- Rental rates have dropped from the peak with no immediate changes anticipated.
- More sales than 2025.
- More lower mainland buyers cashing out and taking advantage of the island prices
I feel like we have gone through the toughest part of the market cycle and 2026 will mark the flat portion before we see the typical increase. Time will tell…
