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.
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.