Is Kelowna, British Columbia one of the top emerging regions in the broader Canadian real estate market? One report suggests so.
Earlier this year, Fundscraper assessed several key performance indicators (KPIs), such as income, housing prices, employment, and gross domestic product (GDP) per capita. What did the website discover?
Kelowna was at the top of the list, followed by Saskatoon and Barrie.
“The national discussion around real estate tends to focus almost exclusively on Toronto and Vancouver, with the occasional mention of other large cities thrown in. But while these markets continue to thrive, they are becoming increasingly expensive and perhaps unaffordable to a growing segment of those looking to invest in, or live in, these cities,” Luan Ha, CEO of Fundscraper, said in a press release.
But this might not be surprising for anyone who lives in the region or has been monitoring housing industry conditions in the broader British Columbia real estate market. Like Ontario, the western province is home to plenty of exceptional places with top-notching housing markets.
Of course, a lot has happened since the study was published in January. Do the latest numbers still purport that Kelowna is one of the country’s best emerging real estate sectors?
Kelowna is One of Canada’s Top Emerging Real Estate Sectors
The latest residential data show that the local Kelowna real estate market is cooling. According to the Association of the Interior REALTORS, home sales tumbled more than 37 percent year-over-year in September, totalling 1,084 unit transactions.
Despite the drop in demand amid higher interest rates and broader market uncertainty, prices enjoyed incredible gains across multiple property categories to close out the third quarter. The average selling price for single-family homes surged 22 percent year-over-year to $1,300,477. The average selling price for townhomes surged 15 percent to $778,794, while condominiums climbed 23 percent to $585,664.
Although single-family homes might be out of range for many Canadian homebuyers, the price tags for other property types in the Kelowna real estate market make the city an attractive place to live.
Meanwhile, supplies have been mixed, with new residential listings sliding close to an annualized rate of seven percent, totalling more than 2,000 new listings. Overall housing stocks, on the other hand, spiked more than 60 percent year-over-year, as there were nearly 8,000 units listed on the market. In addition, the average number of days to sell a residential property was unchanged from August, holding steady at 57 days.
“We are seeing that the Bank of Canada’s interest rate tightening in the last few months is keeping some buyers on the sidelines, although demand remains strong. With no mortgage rate relief anticipated any time soon, some potential homeowners are constrained from being able to enter the real estate market,” said Association of Interior REALTORS® President Lyndi Cruickshank in a statement. “While inventory levels have been climbing, it is still far below pre-pandemic listings levels and far below where it needs to for the needle to move into a balanced market. Pent-up demand is still outpacing supply; however, the increased levels now offer buyers greater options and opportunities than they experienced in early 2022.”
Is the Best Yet to Come? Maybe
Everything about Kelowna, be it its housing market or gorgeous scenery, is luring other Canadians. According to data from Statistics Canada, Kelowna and Central Okanagan posted the fastest-growing population in the nation, rising 14 percent.
The problem? British Columbia Real Estate Association (BCREA) anticipates prices are forecast to slide 19 percent in 2022 and nearly 15 percent in 2023. If people recently purchased near the top, this could result in some financial pain, especially when it is time to refinance mortgage rates.
“We anticipate that five-year fixed mortgage rates will hover around 5.3 percent for the remainder of the year, with the possibility of falling should recession fears amplify next year. Canadian variable rates are expected to increase to 5.55 percent in the fourth quarter as the Bank of Canada continues its tightening cycle,” BCREA noted. “However, we do anticipate some monetary easing by the end of 2023 as the Bank of Canada adjusts to a slowing economy.”
The median price for a single-family home in the summer of last year topped $1 million for the first time on record. The 2022 typically assessed house value sits at around $869,000.
Still, despite the latest developments in the Kelowna housing market, many people believe big things are in store for Kelowna. And, based on the KPIs recently mentioned, they may be proven correct.