After a bumper year in terms of sales and rising prices, in the Kelowna Real Estate Market, I am sure the number one question on Buyers and Sellers minds is will this continue into 2017?
For those of you who just want the ‘bottom-line’, we have highlighted the details in red.
The BC Real Estate Association (BCREA) have now released their 4th Quarter Forecast, which includes their thoughts for the Kelowna / Central Okanagan Real Estate Market, which we thought you would like to read about.
In the report they classify it into the ‘Thompson- Okanagan’ Market which includes the Kamloops area.
The region’s economy is becoming increasingly diversified with already vibrant agricultural and tourism sectors being fortified by health care, manufacturing and a burgeoning high-tech industry.
While the economic malaise evident in Alberta and many other Canadian provinces is having a spillover effect to the region, the number of migrants has largely recovered from a low experienced in 2012. Fewer homebuyers from Alberta, which typically account for about 15 per cent of transactions, are being offset by an increase in migrants from other parts of the province. Many Lower Mainland households reaching retirement age are choosing to relocate to the Thompson-Okanagan region to take advantage of lifestyle opportunities as well as its relative affordability.
Home sales climbed markedly this year as many communities experienced record levels of consumer demand. Condominium sales have been particularly brisk. In Kamloops, apartment transactions are estimated to finish the year up over 50 per cent from 2015, with townhome sales up by 34 per cent. In the South Okanagan, townhome sales are projected to rise by 45 per cent this year, while across the Okanagan Mainline Real Estate Board area a 25 per cent increase is expected for all home types.
Not surprisingly, market conditions tightened significantly over the first three quarters of the year, as record demand in many communities depleted both new and resale home inventories. An imbalance between supply and demand continues to be evident in the Thompson-Okanagan region and the resulting upward pressure on home prices is eroding affordability. Total active listings on the market in October were down 21 per cent in Kamloops, and 29 to 31 per cent in the Okanagan compared to the same month last year.
Higher home prices combined with more restrictive mortgage qualification requirements for first-time and other low-equity home buyers is expected to temper housing demand and limit home price appreciation in 2017. MLS® residential sales are forecast to decline 16 to 17 per cent next year in the South Okanagan and Okanagan Mainline board areas, as consumer demand moves off record levels. Across the KADREA area, home sales are forecast to edge back 9 per cent over the same period. However, housing demand is expected to remain above long term averages, with much of the existing momentum carrying forward through 2017.
After several years of oversupply, complete and unoccupied new units have declined significantly. As a result of dwindling inventories and strong consumer demand, home builders have responded with a dramatic boost in production levels. Multiple starts are estimated to be up 76 per cent in Kamloops, 64 per cent in Penticton and 104 per cent in Kelowna. The relatively large number of units under construction is expected to limit housing starts in 2017, as capacity constraints and moderating consumer demand weigh on the sector.
The average residential price is expected to rise nearly 9 to 12 per cent in the Okanagan and over 5 per cent in Kamloops area this year. However, moderating demand and rising new home completions will trend the Thompson-Okanagan markets toward more balanced conditions next year. As a result, home prices in most areas are forecast to increase near the rate of overall inflation.
To read the Full BCREA Report please click the attached link – http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/housingforecast.pdf?sfvrsn=8
Trish and Tanis
Tel 250 863 8989
Source: BC Home Sales to Decline in 2017 from Record Pace | BCREA