Kelowna Real Estate Market News

Kelowna Real Estate Market CMHC Fall 2018 Report

CMHC have just announced their Fall 2018 Report for the Kelowna Real Estate Market.

Key Points - Kelowna Real Estate Market

  • Year to Date - In the first 8 months of 2018, MLS® sales activity was down 19% relative to the same period in 2017, representing a full 31% decline relative to the peakpace of sales seen in 2016.
  • Slowing demand = increase in active listings & inventory levels are at a similar level to those seen in 2014.
  • Cause  = shifts in key housing market fundamentals including rising mortgage rates &  slowing population growth driven by a decline in interprovincial migration. For the Kelowna area this can be partially explained by a recovery in the pace of economic growth in the Prairie Provinces = greater competition for labour and drawing individuals back to Alberta, in particular.
  • Result - Anticipate flatter price growth as competition for individual units, regardless of the market segment, relaxes and market conditions become more balanced.
  • Forecast - Kelowna resale market activity to be more in line with the 2013-14 period with some recovery in the pace of sales anticipated in 2019 and 2020.
  • Additional risks - additional housing-related policy changes, faster than anticipated mortgage rate increases and stronger than anticipated economic growth in the Prairie Provinces.
New Home Construction likely to continue to moderate based on slowing population growth.

Year to Date - Housing starts down 29%, compared to 2017, with declines seen in both the single- detached and multi-unit segments.

Forecast - Annual housing starts expected to moderate due to the rising level of supply in the new home and resale markets. However, demand for multi-unit options is anticipated to continue to remain fairly robust as price points for multi-unit options remain attractive to both young adults moving into homeownership as well as incoming retirees and downsizers. 

Kelowna Rental market anticipated to see a rise in the Vacancy Rate.

Forecast - Apartment vacancy rate in Kelowna is anticipated to increase gradually as population growth slows, new supply enters the market and young working-age individuals enter homeownership, as price growth in the area slows.

Multi-unit rental options will continue to see 'fairly robust' demand as a larger proportion of individuals aged 25-34 years and 55 years and older choose rental, reflecting shifting preferences.

Kind Regards

Trish Cenci

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