Kelowna Real Estate Market News

BC Economy in relation to Real Estate - December 2018

While you could be forgiven for not following the Commercial Leading Indicator Reports for British Columbia, as it generally relates to the Commercial Real Estate Sector, it does provide some useful economic indicators, which do impact the Residential Real Estate Market.

The financial component, for instance, can act as an early-warning indicator from financial markets of potential turning points in the Commercial Real Estate market which can also affect the Residential Sector. 

Commercial Leading Indicator Q3 Highlights:

Economic Activity:

Retail sales declined 2.3%on a quarterly basis, after adjusting for inflation, and were 1.8% lower year - over 1 year. Retail sales continue to slow sharply from 2017, during which retail sales grew more than 9%. Wholesale trade was also down in the third quarter, falling by 0.1%. That was the first quarterly decline in wholesale trade in 5 quarters. Sales in the manufacturing sector were essentially flat in the third quarter, albeit down 0.2%. On a year-over-year basis, manufacturing sales were up 8.6%.


The benchmark index for Canadian Real Estate Investment Trusts (REITS) declined 1% from the second quarter to the third quarter. Despite a generally higher cost of borrowing, short-term credit spreads narrowed slightly, suggesting a lower risk financial environment.


The CLI employment component increased as office employment jumped by 14,000 jobs. The finance, insurance and real estate sector added an average of 3,700 jobs while the professional, legal and technical services sector added 10,300 jobs in the third quarter. Conversely, manufacturing employment fell by an average of 2,600 jobs in the third quarter. 

What can we read into this for Residential Real Estate in BC?

While overall the economic news wasn't great, the third quarter did see a significant jump in office employment.

If that increase is sustained, it would reflect an increased need for office space in the future, leading to increased investment and leasing activity in the office sector.

For Residential Real Estate - where Real Estate demand has been suffering, particularly in the Lower Mainland, due to the impact of Mortgage Stress Tests, Foreign Buyers Taxes and Speculation Tax we may see increased demand for Condos and Townhomes from new office workers.

If the Lower Mainland Real Estate Market was to show signs of increased demand it is likely to have a 'ripple-effect' across the Province.

Areas like Kelowna and the Okanagan Valley have certainly experienced an increase in demand from younger working families over the last two years as they seek greater affordability and a 'friendlier climate' to enjoy more outdoor living.

To read the full report -:

Kind Regards

Trish Cenci

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