Market Update

     Housing starts in Kelowna have broken the 2,500 mark for three straight years due to a growing economy as a key driver.  Strong employment growth has boosted in-migration and demand for housing.  Retirees and buyers seeking resort oriented housing have also contributed to sharply increased demand for new homes. Multi family housing has seen the strongest growth in demand.  With few new or existing detached units available for under $400,000, more first-time buyers are turning to townhouses and condominiums.  Resort housing and second residences have emerged as the fastest growing segment of the Kelowna condominium market.  In Westbank, a surge in multi-family construction activity last year was due to pent-up demand, expansion of infrastructure and retail services and the prospects of a new bridge across Lake Okanagan factoring into the increase.  Strong absorption of both townhouses and condominiums coupled with low inventories point to more opportunity for expansion in 2008.

      Existing home sales climbed to an all time high in 2007.  Sustained low vacancy rates in conjunction with rising rents, low cost of financing and prospect of significant equity gains have led to more interest from investors.  Rising construction costs began to dampen growth in demand in the third and fourth quarter of 2007.  For now, the Kelowna area resale market remains a seller’s market. 

2008 BC HOUSING FORECASTS:  Existing home sales through MLS (Multiple Listing Service) will edge lower in 2008 as buyers face higher mortgage rates, both in terms of rising posted mortgage rates and smaller discounts.  First-time buyers and buyers with small down payments will play a diminishing role in the market.  The negative demand effects of growing mortgage carrying costs will be offset somewhat by those buyers looking for longer amortization periods. Job opportunities and lifestyle will continue to attract migrants to BC with an increase projected of just over 6% increase both internationally and inter-provincially. Some risks to the forecast are the US housing and economic slowdown, high Canadian dollar, consumer confidence, labour shortage, and the cool-down of the Alberta market.

ACTIVE LISTINGS

Res.

Mobiles

Strata

Lots

SUMMARY OF RESIDENTIAL SALES

2008

2007

18

14

1

3

A FEW MORE REAL ESTATE STATS!

SALES BY TYPE
Year to Date

 2008 

2007

2

1. 1. Strong demand for new, resale and rental housing this year and next.

2. 2. Expect sales activity to ease back from 2007's record high.

3. 3. Housing starts stay at near record highs.

4. 4. Multi-factor sector, both new and resale, continues to see strongest growth in demand.

5. 5. Sustained upward pressure on prices both new and resale units. Expected smaller price gains in 2008 and 2009.

6. 6. Low vacancy rates/rising rents.

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