Not robust but steady growth.
That is the general outlook for the Central Okanagan real estate market, which is coming off two consecutive record-breaking sales years.
Housing inventory is down, making it a seller’s market, while new home construction is seeing a steady upswing resurgence.
“I would say developers are still very moderated,” said Renee Wasylyk, chief executive officer of Troika Developments.
While the boom cycle generated significant equity returns for homeowners during the 2002 to 2007 real estate era, Wasylyk thinks less volatility and more stable growth is a better recipe for the Central Okanagan.
“I don’t see the market going gangbusters or through the roof this year, but there will be positive gains still over the last two years I think and that kind of steady trajectory is healthier for those who live and work here and own residential properties,” Wasylyk said.
Kelowna real estate agent Andrew Smith shares that sentiment that 2017 won’t rack up the same sales numbers as 2016 and 2015, but he still offers some hesitancy about that outlook.
“Everyone is kind of saying the market will scale back this year, but the same thing was said at the beginning of 2016 and the year before, and look what happened,” Smith said.
“I think the first quarter will be better than 2016 but as for quarters two, three and four this year…you tell me.”
Cameron Muir, chief economist for the B.C. Real Estate Association, said what is happening now in the Okanagan is pretty much mirrored across B.C’s southern Interior.
Muir says the Okanagan is seeing several factors that are positively fueling housing sales activity—a growing population, a positive economy that is creating new jobs and Lower Mainland equity-rich homeowners are relocating here filling in the absence of buyers from economic slumping Alberta.
“It’s a seller’s market but at the end of this year, I think while there will be fewer sales compared to 2016 overall but the market is still relatively robust and the economic drivers are moving in the right direction,” Muir said.
The Okanagan Real Estate Board says in its seventh year of tracking sales data, most buyers continue to be those who already live in the market, at 55 per cent, followed by Lower Mainland and Vancouver Island at 21 per cent and Alberta at 12 per cent.
Foreign buyers, meanwhile, continue to be a small percentage of the local buying market at two per cent.
Smith said he also is seeing people who had bought or planned to buy recreational or second homes in places like Maui, Phoenix or Palm Springs that are choosing instead to invest in the Okanagan.
“For Vancouver buyers, these are people rich in equity from their homes, where a house they bought 15 years ago for $415,000 is now selling for $1.8 million. They will come to a development like The Lakes (in Lake Country) and pay $700,000 to buy a new house and not even blink about it.”
Muir said the Okanagan remains a powerful magnet for investment from outside residents which brings wealth to a community, but that characteristic also raises the bar for home investment that local residents can find difficult to access, particularly first-time buyers.
OMREB sales statistics for February showed a 30 per cent drop in the inventory of available properties for sale compared to same month in 2016.
Smith adds it’s becoming more difficult for young first-time buyers to get into the housing market because a house in that was $150,000 in 2000 now will sell for more than $450,000.
“Because of that, young people are leaving, Kelowna’s population is getting greyer and older, and we are seeing more and more outsiders moving in.”