Market Update

      Condominium construction starts are up sharply in 2008, but both absorptions and presales have begun to moderate.  Demand is weakening as consumer confidence declines in the wake of slower economic and employment growth.  Rising costs, together with strong competition from an increasingly well supplied resale market and a
growing number of resort developments elsewhere in BC, have taken a bite out of new condominium sales.  With the Canadian dollar hovering at par, BC resorts are also facing stronger competition from US resort markets.  Alberta buyers may be less active in 2008 and attracted to the US market.  The inventory of complete and unoccupied
condominium units, while low, does not include units made available for resale through the assignment of contracts.  Many assignments are now listed for sale, driving up the supply of active listings.  Condominium starts will reach record highs this year, despite a much more competitive market.  The residential detached unit starts are on par with last year.  Move-up and move-down buyers have remained the focus of new product demand.  Rising land and other costs and longer build times have continued to push up new home prices.  Although the demand outlook is less robust than last year for new construction, it remains positive.    

     Sales in the existing home market have dropped back sharply in 2008 due to moderating demand.  Inventory has jumped to a seven year high.  Reduced demand and high levels of construction activity have contributed to increased supply.  Big gains in home equity have also drawn more sellers into the marketplace.  Condominium inventory rose to the highest level ever with supply more than doubling from a year ago.  Buyers with equity from previous homes account for the lion’s share of residential single unit
demand.  First time buyer demand for detached units has dropped off in the face of soaring prices.  Higher density housing has now become more widely accepted among younger Kelowna area buyers, representing a significant shift in buyer attitudes.  Price, relative to the cost of detached housing, is the motivating factor.  Sustained low vacancy rates, rising rents and low cost of financing have led to more interest from investors.

     Fewer sales, rising supply and the prospect  of more moderate price gains indicate Kelowna’s resale market is moving into balanced market territory from a seller’s market position.

ACTIVE LISTINGS

Res.

Mobiles

Strata

Lots

SUMMARY OF RESIDENTIAL SALES

2008

2007

133

103

16

14

A FEW MORE REAL ESTATE STATS!

SALES BY TYPE
Year to Date

 2008 

2007

18

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