The Kelowna real estate market is expected to remain a seller’s market in 2021. Prices are expected to increase by 5%
Kelowna real estate is expected to continue as a seller’s market with an active year in 2021. This is characterized by a growing demand for single family homes and townhouses outside of large cities. The COVID-19 pandemic and its potential impact in the United States will continue to drive these conditions through 2021. The average selling price in Kelowna rose 5.6% to $ 553,175 in 2020 (January 1 – October 31) compared to $ 523,832 in 2019 (January 1 – December 31). The RE / MAX outlook for Kelowna real estate in 2021 is an increase in the average price by approximately 5% to approximately USD 580,833 across all property types.
Who is driving demand for Kelowna real estate?
Relocation buyers are currently driving demand in the Kelowna property market, which is expected to continue into 2021. This hasn’t specifically changed since early 2020, but it does emphasize the increase in people selling their homes in a less desirable area (possibly affected by a pandemic) in order to move to a more desirable location.
First time buyers in Kelowna tend to be families looking for condos and townhouses that range from $ 350,000 to $ 550,000. First-time buyers who struggled to buy property in 2020 are unlikely to find relief in 2021. Low inventory levels and soaring prices in Kelowna are expected to continue into the next year.
There have been some concerns among first time buyers in 2020 as house prices have never come down. With Kelowna inventories remaining low, prices will hold up through 2021.
Young buyers in the Kelowna area are typically young couples. There was little concern among young buyers as the COVID-19 pandemic has seen more young couples sell their condos and townhouses on the lower mainland and buy single-family homes in the Kelowna suburbs. This is expected to remain so until 2021. Limited supply and soaring prices have proven to be the difficulties aspiring buyers face when shopping in Kelowna.
The Kelowna condominium market was the only category to see a year-over-year decline in sales in 2020. However, the average sales price for condominiums remained constant, which is expected to remain the same in 2021. The Kelowna condominium market is popular with individual buyers, and demand for condominiums is expected to decline in 2021.
The luxury market in Kelowna is currently being driven by emerging buyers. The typical starting price for a luxury home in Kelowna is around $ 1,200,000. COVID-19 initially weighed on the luxury real estate market, but Kelowna saw a surge in luxury sales between wave 1 and wave 2 of the pandemic. If the pandemic worsens, the surge in luxury sales in Kelowna is expected to decline through 2021.
Kelowna’s hottest neighborhoods
Kelowna’s top selling neighborhoods in 2020 were Lake Country, Upper & Lower Mission, and Rutland. Lake Country continues to drive new builds at similar prices as older established Kelowna homes, which makes it desirable. Rutland continues to keep an eye out for investors in terms of rental potential and development. Upper & Lower Mission continues to be in demand for desirable neighborhoods. There has been a noticeable increase in developers looking for land gatherings in many OCP city centers.
Kelowna new building
The new home market in Kelowna was strong in 2020 after slowing in 2019. Since the beginning of the COVID-19 pandemic, construction activity for new buildings has increased steadily and is currently not keeping pace with demand. New home prices are similar to the Kelowna resale market, with older homes more focused on the lot and location within the city, while new build focuses on the construction itself. A new trend that has emerged since the beginning of the COVID-19 pandemic is that more land assemblies in the OCP have designated urban centers for densely populated buildings with mixed use, which is expected to continue through 2021.
Lake Country is an area that has done very well in terms of home construction, and the area around the University of British Columbia – Okanagan is also growing steadily.
Canadian housing market in 2021
Canadians are on the move. RE / MAX does not call this an “exodus,” but the relocation trend in the Canadian real estate market is real and only one focus of the RE / MAX 2021 Housing Market Outlook Report. RE / MAX Canada expects healthy house price growth at the national level. Moving and moving buyers are continuing to drive activity in many regions of the Canadian real estate market. A sustained and widespread shortage in the supply of apartments is likely to persist and pose challenges for home buyers and push up price pressure.
Because of these factors, the outlook for 2021 RE / MAX 2021 for average home prices across the country is estimated at + 4% to + 6%. Here is the regional breakdown:
.
Further results of the report are:
- 35% of RE / MAX brokers say buyers from other cities and provinces will continue to trigger market activity in 2021
- 45% of RE / MAX brokers say aspiring buyers are likely to be a major driver of demand in the property market in 2021
- Half of Canadians (53%) are confident that Canadian real estate markets will remain stable in 2021
- 52% of Canadians believe real estate will remain one of the best investment opportunities in 2021
“Despite the tragic effects of the pandemic, our optimism about the strength of the Canadian real estate market has remained,” said Elton Ash, RE / MAX Regional Executive Vice President in Western Canada. “While buyer preferences have shifted significantly this year, we believe factors such as the supply problem, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”
