What’s Really Happening in Vancouver Island’s Real Estate Market Right Now
The last few months have brought some significant shifts to Vancouver Island’s real estate scene. At The Shanon Kelley Realty Group, we’re seeing firsthand how these changes are affecting buyers and sellers across Central Vancouver Island. Here’s what you need to know heading into the final months of 2025.
The Market Has Found Its Balance
After years of wild swings—remember those bidding wars?—things have settled into what most people would call a balanced market. Vancouver Island Real Estate Board CEO Jason Yochim points out that the island is sitting at just under six months of inventory, which puts buyers and sellers on fairly equal footing.
Active listings have climbed well above long-term averages, giving buyers more options than they’ve had in years. This isn’t the frantic market of 2021, and that’s good news for everyone. Transactions feel less rushed, and there’s room for proper due diligence on both sides.
Prices Are Holding Steady (Mostly)
Here’s something that might surprise you: most Vancouver Island communities saw property assessment changes between -5% to +5% in 2025 Oak Bay News. That’s remarkably stable compared to recent years.
Location still matters. North Island communities have seen the strongest price growth. Places like Tahsis experienced a 21% increase, while Alert Bay saw a 10% jump. Meanwhile, urban centers like Nanaimo have stayed relatively flat, and some areas like Ucluelet and Port McNeill dropped by 7% Oak Bay News.
In our Central Vancouver Island market—spanning from Malahat to Bowser, including Parksville, Qualicum Beach, Nanaimo, and extending west to Port Alberni and Cowichan Valley—we’re seeing this stability play out in real-time.
Mortgage Rates Are Finally Moving in the Right Direction
One of the biggest game-changers has been the shift in mortgage rates. After what felt like an eternity of high borrowing costs, rates have started trending downward. As of mid-2025, 5-year fixed rates were sitting between 3.89% and 4.64%.
Lower rates mean more buying power. Buyers who were priced out six months ago might find themselves back in the game. Sellers are seeing renewed interest from buyers who can finally make the numbers work.
New Rules Worth Knowing
Several regulatory changes have kicked in recently:
- Building Code updates (March 2025) mean stricter standards for new construction—generally better quality and energy efficiency
- Short-Term Rental Registry (May 2025) puts tighter controls on vacation rentals, particularly in areas like Tofino and Parksville
- Home Flipping Tax targets speculative investors with rates up to 20%, aiming to stabilize pricing
- Small-scale multi-unit housing zoning changes have opened new opportunities for redevelopment and densification
What’s Driving Demand
The island continues to attract remote workers, retirees, and people looking for lifestyle change. Vancouver Island benefits from some of the mildest weather in Canada, with less snowfall and more temperate conditions year-round—a big draw for seniors and young families alike.
Between 2020 and 2025, Vancouver Island actually outperformed the Lower Mainland in terms of single-detached home price growth. At The Shanon Kelley Realty Group, we’re helping more mainland buyers discover the value and lifestyle benefits of Central Vancouver Island communities.
However, economic uncertainty around potential US tariffs has created “pent-up demand”—buyers who want to purchase but are waiting for more certainty before pulling the trigger.
What This Means for You
If you’re buying:
You’re in a better negotiating position than you’ve been in years. Take your time, do your homework, and don’t be afraid to make offers that reflect actual market value. The days of throwing in an extra $50K just to compete are behind us. The Shanon Kelley Realty Group can help you navigate this balanced market and find properties that truly fit your needs and budget.
If you’re selling:
Presentation matters more than ever. With more inventory on the market, properties that show well and are priced right will still move. Highlight any eco-friendly features, recent upgrades, and lifestyle benefits your property offers. We work with our sellers to position their homes strategically in today’s market.
If you’re investing:
Focus on areas with strong rental demand or value-add potential. Keep the new short-term rental regulations in mind, and remember the flipping tax if you’re thinking short-term gains. Purpose-built rentals in tourist areas like Tofino and Parksville continue to show strong demand Haven Realty Group.
The Bottom Line
The Vancouver Island real estate market has moved from unpredictable to steady. That might not make for exciting headlines, but it makes for a healthier, more sustainable market—one where people can make thoughtful decisions without feeling rushed or pressured.
Whether you’re a first-time buyer finally able to enter the market, a seller looking to downsize, or someone just keeping an eye on their biggest investment, this period of stability is something to appreciate.
At The Shanon Kelley Realty Group, we’re here to help you make informed decisions in this evolving market. Serving Central Vancouver Island from Malahat to Bowser along the east coast, including the Gulf Islands near Nanaimo, and west to Port Alberni and Cowichan Valley, we combine local expertise with personalized service.
Have questions about what these market changes mean for your specific situation? We’re always happy to chat about your real estate journey.
