We are hearing rumblings that the Kelowna Real Estate Market is ‘softening’ and hence Buyers are wondering whether prices are going to start to fall.
We decided to take a look at some of the various Economic Indicators for the Kelowna Area to give more insight into what the numbers are telling us.
Kelowna Employment Level
This chart illustrates the number of individuals employed on the Kelowna Census Metropolitan Area, based on Statistics Canada’s Labour Force Survey. Higher levels of employment typically generate demand for new home construction and resale transactions. Employment equals the labour force minus unemployed individuals.
As you can see there has been a sharp increase in Employment in Kelowna recently, which is leading to increased demand.
Quarterly Housing Starts – Kelowna
Kelowna Census Metropolitan Area housing starts reflect the number of foundations poured for new homes. New home investment comprises a significant proportion of economic activity and generally correlates with overall economic activity. New home starts reflect demand for homeownership and household growth. As the demand for homeownership increases the housing stock tends to expand to meet it.
Here we see how Housing Starts have been rising over the last couple of years in Kelowna.
Kelowna Unemployment Rate
This chart shows the unemployment rate of the Kelowna Census Metropolitan Area over time. The rate is measured as the percentage of those in the labour force without a job. The labour force includes people currently working and those looking for work. Areas with relatively lower unemployment rates are likely to attract a higher share of economic migrants.
Interestingly these numbers kept rising in the last year and eventually started to fall this summer, which could be due to more jobs associated with the Summer Tourist trade.
OMREB Sales-to-Active Listings
This indicator shows the relative balance between the demand for homes and supply of homes in OMREB’s market. A high ratio denotes a market that is more in favour of sellers creating upward pressure on prices. A low ratio reflects a market in favour of buyers, putting downward pressure on prices. A balanced market is generally associated with a ratio between 0.15 and 0.20, where pressure on home prices is considered neutral.
This is the graph is the most telling graph. As you can see, we are still firmly is Sellers Market territory, which will continue to add upward pressure to prices.
What does this mean overall for the Kelowna Real Estate Market?
At the moment the key Economic Indicators are looking good for Kelowna and the surrounding area and we remain in a ‘Sellers Market’.
While we are seeing more availability in the higher price range of homes, well-presented Condos and Town Homes are still in high demand.
The Interest Rates rises have not had much of an effect so far, but that could change if the Banks change the ‘affordability’ criteria again.
All this points to prices continuing in an upward trend in the Kelowna Real Estate Market for the foreseeable future.
If you have any specific questions on the Kelowna Real Estate Market, or we can assist you with your Purchase or Sale of Property in Kelowna or the Central Okanagan Valley, please do not hesitate to contact us.
Trish and Tanis
Tel 250 863 8989