From Kelowna to Kamloops to Vancouver to Victoria, British Columbia’s real estate market was on fire. However, this is easy to do when supposedly the entire Canadian real estate market is trending at record highs. Sales are booming, prices have never been so high, supply is shrinking and demand is high – both in the province and across the country. There are many factors that explain what is happening across the Great White North.
But has the Canadian real estate market reached its zenith? When focusing on specific parts of the country, that would be the final conclusion, especially as new factors come into play.
The Kelowna real estate market is one of those Canadian housing sectors that seem to have peaked. But once you scratch below the surface, you’ll learn that Kelowna and the wider Central Okanagan are experiencing a temporary slowdown after more than a year of meteoric growth. The term “slow down” is perhaps a bit of an exaggeration considering that The prices are the highest they have ever had.
With fewer offers and increasing demand, developments in Kelowna continue to point to an upward housing market. What happened at the end of the normally busy spring shopping season? Let’s look at what the numbers highlight.
A look at what’s new in the Kelowna real estate market
According to the Association of Interior Realtors, home sales in the Central Okanagan-centric Kelowna real estate market fell 13.78 percent in May from the previous month to 1,482 units.
On the price front, the benchmark retail price for a single-family home in Kelowna rose to an all-time high of $ 901,600 in May, up 2.45 percent from April. A townhouse and condo in Kelowna is priced at $ 621,800 and $ 455,400, respectively.
While sales activity has subsided, prices continue to rise. So what is driving activity in this small but strong real estate market in British Columbia? It all boils down to one common problem seen across the Canadian real estate market: limited offer.
Home buyers take their time buying properties, with 24 days to sell. However, when assessing the annualized inventory rate in May, prospects are battling over shrinking property inventories.
- Single family home: -53%
- Townhouses: -58.8%
- Condominiums: -44.9%
The listings have also leveled off from the same point in time a year ago, data from the Okanagan Mainline Real Estate Board (OMREB) shows:
- Single-family house -46% (716)
- Townhouses: -59% (163)
- Condominiums: -45% (338)
“What we can look at is what is happening right now and supply is not yet catching up with demand. We are in a supply drought when it comes to listings“Said Kim Heizmann, President of the Association of Interior REALTORS®, in a press release.
“Despite the supply drought, the market remains strong and is starting to streamline,” she added. “With the introduction of vaccines, more and more people are being vaccinated and we’re getting some mobility and comfort back. Hopefully more houses will come on the market. “
Could any new offer for the Kelowna real estate market be in sight? New properties are being built, but they slowed down in May. Housing starts rose 95 in May, up from 156 at the same time a year ago, according to Canada Mortgage and Housing Corporation (CMHC). In the first five months of 2021, 816 housing starts were recorded, 767 more than in the previous year.
Has the Kelowna real estate market peaked?
Does this mean the Kelowna real estate market has peaked with prices at all-time highs and declining sales activity? It is easy to assume that this is the case after the shopping spree last year following the first wave of the COVID-19 public health crisis. However, industry experts claim that this is a temporarily Slowing down mainly because prices are still minimal and demand remains strong. As soon as the dust settles and so-called buyer fatigue subsides, the real estate market in Kelowna is expected to see an upswing again.
Sharing a perfectly fitting analogy to describe the current situation in this local real estate market, Heizmann told Kelowna Now, “We are seeing a release of the accelerator pedal (of a car) that has gone past the speed limit to move about now at a reasonable rate Tempo. The pressure eases slightly, which has a calming effect on a healthier market for both buyers and sellers. “
