If the ample supply of cranes in Kelowna’s downtown aren’t evidence enough, there’s more cause to believe that this city is in the throes of a building boom.
It was a record breaking year for Housing Starts in Kelowna, the Canadian Mortgage and Housing Corporation announced earlier this month, noting that 2017 saw 3,577 units go under construction with 923 being single-detached homes and the remaining 2,654 being condominiums and apartments. Of note 1,773 of the projects—roughly 53 per cent—under construction were rental units and that is the largest number of rental units constructed in the region since 1977.
“In the past few years we have seen strong migration into the Kelowna area,” said CMHC senior market analyst Taylor Pardy.
“In 2016, the area gained 4,000 people and that’s been fuelling population growth in the area … and the labour market bounced back in 2017. Employment numbers moved up 10 per cent. That was a driver in housing starts.”
It’s not just retirees moving to the area, either. Pardy said that people between the ages of 25 and 34-years-old are moving to the area in a stronger way in addition to the 55-years and older segment of the population.
While 2017 will go down as a banner year for construction, what remains to be seen is whether the pace will be kept up going forward.
“We are anticipating housing starts to moderate from record level in 2018 a little bit,” said Pardy, adding that 2018 and 2019 will be en par with 2006 and 2007, as far as construction goes.
Double-digit increases in Kelowna home prices were the norm during the fourth quarter of 2017, according to the Royal LePage House Price Survey released Wednesday.
During the period, the aggregate price of a home in the region increased 12 per cent year-over-year to $637,894.
When broken out by housing type, the report showed significant year-over-year growth in prices across all housing types surveyed in Kelowna. In the fourth quarter of 2017, the median price of a two-storey home, bungalow and condominium increased eight per cent, 16.7 per cent and 19.5 per cent year-over-year to $718,131, $634,927 and $412,280, respectively.
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“The Kelowna housing market remained strong in the fourth quarter, with sales keeping pace right through to Christmas,” said Francis Braam, managing broker and owner, Royal LePage Kelowna, in a press release.
“We continue to see an influx of buyers coming from the Lower Mainland and Alberta to take advantage of Kelowna’s relative affordability. This, coupled with the strong economy and an influx of younger people taking advantage of employment opportunities in the city, has increased home prices and pushed the region into a seller’s market across all housing categories.”
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