In Kelowna, we are sensing some nervousness by Buyers as to whether the prices in our Real Estate Market have reached the top.We always try to look at a variety of reliable sources in making our assessments, and BCREA is an excellent resource, in this regard.In reading their Q3 Housing forecast for BC Real Estate, there doesn’t seem to be any end in sight at the moment.
Here is the latest report from Cameron Muir, Chief Economist and Brendon Ogmundson, Economist of the BC Real Estate Association.
Multiple Listing Service® (MLS®) residential sales in the province are forecast to reach 100,900 units this year, a decline of 10 per cent from a record 112,200 unit sales in 2016. MLS® residential sales are forecast to edge back nearly two per cent to 99,000 units in 2018. Housing demand is expected to remain above the 10-year average of approximately 85,000 units over the next two years. Strong economic growth and the associated increase in employment are key drivers in the BC housing market. A growing population and demographics are also fueling demand in the province’s urban centres.
The BC economy has expanded at above trend growth for over three years. Indeed, 2017 is expected to be the fourth consecutive year of 3 per cent or higher growth in the economy. The dollar volume of BC exports increased over 20 per cent in the first half of the year, led by energy, minerals and agriculture. The cumulative effect of a strong economy and rising employment levels has bolstered consumer confidence. BC employment was up 3.9 per cent year-to-date in July, compared to the same period last year, an increase of over 88,000 jobs. In addition, retail sales in the province are expected to climb close to 8 per cent this year.
Population growth and demographics are also playing a key role in the housing market. BC’s strong economy and employment opportunities are attracting an influx of migrants from other provinces. Net interprovincial migration over the past three years has been the strongest in over two decades. In addition, the millennial generation is now entering their household forming ages, which will continue to exert pressure on the rental market and on affordable ownership supply.
Most BC regions are experiencing a limited supply of homes for sale, with market conditions favouring home sellers, especially in the Lower Mainland condominium market. This imbalance is pushing prices higher in the most affordable home types and will lead to a drag on home sales if new supply isn’t sufficient to meet demand. However, strong housing demand and tight supply haven’t gone unnoticed by home builders. There are nearly 40,000 units under construction in Metro Vancouver alone, a 60 per cent increase from the previous peak in 2008. Once completed, market conditions are expected to reflect a greater balance between supply and demand and reduce further erosion of affordability.
If you have any questions about our local Real Estate Market, here in Kelowna and the Central Okanagan, or would like to know how much your Home is worth, please call us today for a free Market Evaluation!
Trish and Tanis Real Estate
Tel 250 863 8989
Source: Strong Economy supports Robust Housing Demand | BCREA