The BC Real Estate Association (BCREA) has just come out with it’s latest Housing Forecast for the Kelowna and Okanagan area Real Estate Market, and we thought you would be interested to read the highlights of their report.
The Thompson-Okanagan region ( Kamloops & District Real Estate Association, Okanagan Mainline Real Estate Board & the South Okanagan Real Estate Board) region typically accounts for nearly 15% the of provincial MLS® residential sales – with the economy driven by the forestry, tourism ,manufacturing industries and the agriculture sector.
BC’s non-seafood agricultural and food exports have been an important source of growth this year, rising 23 per cent and helping to offset weakness in other areas of the trade sector.
The fallout from the sharp decline in oil prices and investment has likely impacted parts of the local economy through cross-border supply chains and Alberta bound workers. However, employment has recently trended higher and the unemployment rate continues its downward trajectory.
Stronger labour market conditions are not only tied to robust domestic consumption, but also a recent increase in population growth. Net migration to the Thompson-Okanagan has trended higher in recent years after a significant post-recession downturn. The oscillation was more pronounced in the Kamloops area than along the Okanagan Valley.
Nevertheless, a marked increase households moving to the region from other provinces and from within BC have likely bolstered local housing demand. MLS® residential sales are projected to rise nearly 7 per cent in the Kamloops area and 10 to 13 per cent in the Okanagan this year.
After several years of relatively moderate home sales activity, the region is experiencing a resurgence of housing demand from local owner-occupiers, recreation buyers and investors. Through the first three quarters, nearly one in ten homes sold through the Okanagan Mainline Real Estate Board were to revenue investors.
Robust consumer demand has tightened market conditions throughout the region. Many Okanagan communities are experiencing sellers’ market conditions, while the Kamloops area is exhibiting strong balance. Strong market conditions are putting upward pressure on home prices as buyers compete for the best properties. The average home price is projected to climb nearly 3 per cent to a record $409,000 in the Okanagan Mainline Real Estate Board Area this year.
Home prices in the South Okanagan are expected to be up 5.5 per cent, while the Kamloops and District area will likely post an increase of 3.4 per cent.
Some of the strongest price gains are occurring in apartments and town houses in the Okanagan. After several years of oversupply, builders and developers are increasing production.
A significant and unsustainable ramping up of new home construction activity prior to the recession in 2009 created a mountain of complete and unoccupied units in the Kelowna CMA. It took nearly 6 years to drawn down the inventory to the point where many proposed projects could get off the ground.
The new home market in the Thompson-Okanagan region is now much better balanced and able to respond to changing consumer dynamics. Housing demand is expected to edge back in 2016 as pent-up demand is largely now expended and the fallout from a weaker Alberta economy continues to limit growth.
However, a 2 to 5 per cent pull back in home sales is more a sign of market stabilization than a signal of decline. Indeed, MLS® residential sales are up 42 per cent in the Thompson-Okanagan since 2012, representing stronger underlying economic fundamentals and demographic trends.
If you have any questions about this report or have any questions about your own Buying and Selling needs please do not hesitate to contact us.
Trish and Tanis
Kelowna Real Estate Agents
Tel 250 863 8989