The people and their money moving to Kelowna will keep the local real estate market going for at least five years.
“Population growth is expected to increase demand for all types of housing in Kelowna over the next five years due to heavy migration,” said Taylor Pardy, an analyst at BC Interior, in a forecast released Wednesday by Canada Mortgage and Housing Corporation .
“The report shows strong migration to Kelowna, particularly among young adults and seniors, which correlates with increased demand for multi-unit housing.”
Multi-family houses are apartments, condominiums, townhouses and maisonettes.
The company’s forecast is welcome news, suggesting that the current hot Kelowna real estate market is not lightning in the pan. It also shows that Kelowna isn’t just a retirement and vacation destination.
The city has a healthy, diverse economy that attracts young people in their prime to work in their own businesses or in sectors ranging from high tech to healthcare and tourism to professional services, tourism and wine.
The company’s report cites projections from BC Statistics that Kelowna will grow by 0.5 to 5.1 percent from now through 2020 for ages 25-29, 30-34, 35-39, 40-44, and 45-49 demonstrate.
The age groups of the early retirees and retirees also show unevenness between 0.4 and 6.5 percent.
Very little of Kelowna’s 3.25 percent annual population growth is babies born in the city.
Much of this comes from people moving here from Vancouver and Alberta. Around 18 percent come from people who move here from other parts of the province, and 12 percent from our neighboring province.
“Kelowna is not in a bubble,” said Anthony Bastiaanssen, president of the Okanagan Mainline Real Estate Board, a real estate agent at ReMax.
“Bubbles are for the extremely hot markets of Vancouver and Toronto. Kelowna’s real estate surge is based on fundamentals and migration. “
That means 56 percent of Okanagan home buyers are local residents who buy their first place, move to a larger and more expensive home, or downsize or enlarge as empty nests, early retirees or retirees.
There has been some speculation that the 15 percent tax on foreign homebuyers in Vancouver to cool this market will encourage overseas buyers to look to secondary cities like Kelowna and Victoria.
“I don’t think we’re going to get much of this activity in Kelowna,” said Bastiaanssen.
“Vancouver overseas buyers want to be in Vancouver and are usually so rich that they won’t be put off by a 15 percent premium. We see the ripple effect in Vancouverites making money and moving to Kelowna to buy a cheaper home. “
Of course, affordable is relative.
The average retail price of a single-family home in Kelowna hit a record high of $ 625,000 in July, up a whopping 19 percent from the same month last year.
But that’s still cheaper than the $ 1.1 million average in Vancouver.
The July Okanagan Mainline Real Estate Board figures also show that the average condominium sales price rose seven percent to $ 290,400 and townhouse prices rose 16 percent to $ 451,500.
Central Okanagan home sales for July were 668, up 24 percent from the 540 that changed hands in the same month last year.
This demand and relatively few homes available for sale result in a sellers market where homes are snapped up quickly, possibly after multiple offers have driven the price high.
