The year 2021 is one that the Kelowna real estate industry hopes will never end.
In a dramatic and unexpected way, the Okanagan real estate boom has seen a boom since early last fall, despite the impact of COVID-19, a boom cycle that some experts say could extend for the rest of the decade.
While those who sell land and housing are making money, affordability has reached a crisis point.
“I think when we look back on 2021 in the real estate industry, we’ll say it was a good time, but maybe the party ended too quickly,” said Scott Brown, CEO of Epic Real Estate Solutions / Fifth Avenue.
Brown was one of three guest speakers for the monthly Zoom lunch forum hosted by the Okanagan branch of the Urban Development Institute.
Brown joined Marshall McAnerney, Principal / Co-Founder of HM Commercial Group, and Courtney Deshayes, a licensed property manager with Associated Property Management.
Speaking to the home sales market, Brown said sales of condominiums, single-family homes, townhouses, and high-rise apartments have all increased since last September.
“We’ve had what is known as a hot winter in home sales, and that suggests the summer will double from 2020,” Brown said, noting that unsold inventory was down 50 percent from six months ago are.
Brown suggested that pent-up buying demand across the Okanagan, especially prominent in Kelowna, is being driven by people moving into the valley rather than people moving within a particular community.
READ MORE: Okanagan’s real estate market heats up in January
He says the buyer’s market comes from across Canada. The ability to work from home made it easier for people to choose the Okanagan lifestyle and sparked migration into the country, which is expected to be further supported by a new wave of immigration from outside Canada to settle here.
“This exodus of people from larger urban centers like Vancouver began a few years ago, and we are seeing this reflected in both the Greater Victoria and Kelowna regions where the real estate market has exploded,” he said.
“In the Kelowna area, younger people come here to work remotely or to find new jobs. Those 55+ are still working but are seeing the potential to work remotely again because COVID has imposed on us and people who are retiring are still coming here.
“And when you think about whether to deal with a freeway or a ferry, that puts Kelowna in an enviable position.”
Deshayes said of 10 leases she recently supervised, only one was a move from Kelowna and the rest were from Vancouver, Toronto and Alberta.
As with residential property sales where demand exceeds supply, Deshayes sees the same characteristics in the rental market – good news for investors, but bad news for renters, where rental rates are rising and availability is falling.
“In some cases we don’t even advertise vacancies. Vacancies are filled quickly, either through word of mouth or through friends, ”she said.
She said statistics from Central Kelowna show condominium rental prices rose from $ 1,500 to $ 2,450; Main floor of a home from $ 1,600 to $ 2,300; and basement suites $ 1,400 to $ 2,000 as of 2018.
“It’s very difficult for tenants right now,” she admitted. “But there will be more stock on the market in the coming months, so I feel good about it. It’s a hot time for the market right now. “
Addressing the commercial / industrial side of the industry, McAnerney summed it up as follows: “What a difference a year makes.”
The land available has become a coveted commodity with numerous development opportunities throughout the valley and the interest of Lower Mainland and Alberta developers.
Commercial space leasing has also seen a surprising resurgence despite the economic impact of COVID, particularly in the food and beverage sectors and some personal services.
“The leasing market is still on fire despite COVID, but the office leasing category has been the slowest to recover,” said McAnerney.
“Larger companies have been reluctant to enter into long-term leases. Interest in leases under 10 years old is greater due to the uncertainty surrounding the design space for physical distancing. “
Brown believes the “canary in the coal mine” scenarios that could change the current market boom include a sudden spike in the mortgage default rate or the federal government using a regulatory hammer to contain an overheated market, as it did in 2016 in response the rising mortgage debt ratio for homeowners.
On the rental side, Deshayes said the rental crisis, which is driving rental rates soaring, will continue to make rental options more affordable.
“Many people will have the opportunity to move out of the city and go to a cheaper place. The housing shortage worries me,” she admitted.
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