The real estate boom across the Okanagan has not felt a negative impact from the coronavirus impact on our national economy. (Contributed)

The real estate boom across the Okanagan has not felt a negative impact from the coronavirus impact on our national economy. (Contributed)

Okanagan real estate boom keeps escalating

Predictions of the current boom extending through the 2020 decade

The 2021 year is one the Kelowna real estate industry hopes will never end.

In dramatic and unexpected fashion, the Okanagan real estate boom has taken a wild upswing dating back to early last fall, despite the impact of COVID-19, a boom cycle some experts say could extend for the rest of the decade.

While those selling land and housing are cashing in, affordability has reached a crisis point.

“I think when we look back at 2021 in the real estate industry, we are going to say it was a good time, but maybe the party ended too fast,” said Scott Brown, CEO of Epic Real Estate Solutions/Fifth Avenue.

Brown was one of three guest speakers for the monthly luncheon Zoom forum hosted by the Okanagan branch of the Urban Development Institute.

Joining Brown were Marshall McAnerney, principal/co-founder of HM Commercial Group, and Courtney Deshayes, a licensed property manager with Associated Property Management.

Speaking to the residential sales market, Brown said condos, single-family detached, townhomes and high-rise housing categories have all seen sales escalate dating back to last September.

“We have had what I would call a hot winter in housing sales and that suggests the summer will double what we saw in 2020,” said Brown, noting unsold inventory has dropped 50 per cent compared to six months ago.

Brown suggested the pent-up buying demand across the Okanagan, spotlighted particularly in Kelowna, is driven by people moving to the valley instead of people moving around within a given community.

READ MORE: Okanagan real estate market heats up in January

He says the buyer market is drawn from across Canada, people making a lifestyle choice to live in the Okanagan made more feasible by the ability to work at home, setting off an in-country migration that is expected to be further buttressed by a new wave of immigration from outside Canada settling here.

“That exodus of people from the larger urban centres like Vancouver started several years ago, and we are seeing that reflected both in the Greater Victoria and Kelowna regions where the real estate market has exploded,” he said.

“In the Kelowna region, younger people coming here to work remotely or find new jobs, the 55-plus crowd still working but again seeing the potential to work remotely because of what COVID has imposed on us, and people retiring are still coming here.

“And when you think about whether you want to deal with a highway or a ferry, it puts Kelowna in an enviable position.”

Deshayes said of 10 recent rental agreements she oversaw, only one was a Kelowna person relocating, the rest coming from Vancouver, Toronto and Alberta.

Like residential home sales, where demand exceeds supply, Deshayes says she sees those same characteristics play out in the rental market – great news for investors but bad news for renters seeing rental rates spike and availability reduced.

“In some cases, we are not even advertising rental vacancies. Either by word of mouth or through friends, vacancies are filled quickly,” she said.

She said Central Kelowna statistics reveal rental rates for condos have jumped from $1,500 to $2,450; main upstairs of a house from $1,600 to $2,300; and basement suites $1,400 to $2,000 since 2018.

“It is very tough out there for tenants right now,” she admitted. “But there is more inventory coming on the market in the months ahead, so I feel good about that. It is a hot time for the market right now.”

Addressing the commercial/industrial side of the industry, McAnerney summed it up this way: “What a difference a year makes.”

Available land has become a hot commodity, entertaining multiple offers for development across the valley, attracting the interest of Lower Mainland and Alberta developers.

Commercial space leasing has also seen a surprising resurgence despite the economic impact of COVID, trending particularly in the food and beverage areas and some personal services.

“The leasing market is still on fire despite COVID, but the office leasing category has been the slowest to rebound,” McAnerney said.

“Larger corporations have shown a hesitancy to lock into long-term leasing deals. There is greater interest in leases under 10 years due to the uncertainty around design space for physical distancing.”

Brown believes the ‘canary in the coal mine’ scenarios which might alter the current market boom include a sudden rise in the mortgage default rate or the federal government using a regulatory hammer to curb an over-heated market as was done in 2016 in response to the rising mortgage debt ratio for homeowners.

On the rental side, Deshayes said the rental crunch driving up rental rates will continue to make it more difficult for affordable rental options.

“A lot of people will be left with the option of moving out of the city and go somewhere else cheaper…the housing crunch is what worries me,” she acknowledged.

CoronavirusReal estate

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Five properties have been added to the Lake Country fire protection zone, after council moved to expand the local service area Tuesday, May 4, 2021. (Google Maps)
Lake Country expands fire protection zone, covering 5 exposed properties

The properties petitioned to join the local service area after being left out ‘for reasons unknown’

VSAR’s Air Rescue One unit assisted in a rescue in West Kelowna May 3, 2021. (VSAR screenshot)
VIDEO: VSAR’s Air Rescue One team assists in West Kelowna Rescue

The Vernon Search and Rescue helicopter team pulled off a successful rescue Monday

Peachland resident and cleanup volunteer Lloyd Stinson Sotas holds up a discarded TV riddled with bullet holes. (Aaron Hemens/Capital News)
PHOTOS: Peachland residents clean up community watershed

More than 70 people gave back to Mother Earth by assisting with the cleanup

Kelowna Toyota is located at 1200 Leathead Road. (BLack Press Media file)
Kelowna Toyota’s auto service department closed due to COVID-19 exposure

The dealership’s sales department is still open and is operating under regular business hours

COVID-19. (Image courtesy CDC)
Kelowna OK Tire closed due to COVID-19 exposure

The business will remain closed until May 11

Two e-scooters parked on the sidewalk along Water Street in downtown Kelowna on Monday, May 3. Scooters parked on walkways are causing accessibility issues for some people with disabilities. (Michael Rodriguez/Capital News)
Black Press Media Weekly Roundup: Top headlines this week

Here’s a quick summary of the stories that made an impact from May 3 to 5

Edmonton Oilers’ Connor McDavid (97) celebrates his 100th point this season with Leon Draisaitl (29) against the Vancouver Canucks during second period NHL action in Edmonton on Saturday, May 8, 2021.THE CANADIAN PRESS/Jason Franson
Edmonton superstar McDavid hits 100-point mark as Oilers edge Canucks 4-3

NHL scoring leader needs just 53 games to reach century mark

City of Vernon Coun. Dalvir Nahal proposed two blocks of Main Street be closed to bolster recovery for downtown businesses amid the COVID-19 pandemic. (Caitlin Clow - Vernon Morning Star)
Vernon’s ‘support local’ Main Street closure would cost city $24K, staff say

Bylaw costs, loss of parking revenue and equipment logistics behind price tag

Officials are surveying the streets of Vernon to get a better sense of the issue of homelessness in the city, as part of the province’s point-in-time homeless count for 2021. (Brendan Shykora - Morning Star)
Province conducts homeless count in Vernon

It’s the first time Vernon has been included in the provincial homeless count

A map showing where the most number of cases were recorded from April 23 to 29. This map, revealing a breakdown of infections by neighborhood, was pulled from a data package leaked to the Vancouver Sun last week (and independently verified).
36 Abbotsford schools flagged for COVID-19 exposures in the last 2 weeks, shattering record

Clearbrook Elementary recorded an ‘exposure’ on all 11 school days

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A proposed development would see two four-storey affordable housing complexes erected on Adair Street in Armstrong, next to the Nor-Val Arena. (Google Maps)
Local tenants to be prioritized for Armstrong affordable housing project

Staff have drafted an expression of interest to find a developer to move forward with on the project

Canada’s chief public health officer is reminding Canadians even those who are fully vaccinated are not immune from transmitting the COVID-19. THE CANADIAN PRESS/Adrian Wyld
Canada’s top doctor warns full vaccination does not equal full protection from COVID-19

Post-inoculation, Theresa Tam says the risk of asymptomatic infection and transmission is far lower but not obsolete

Most Read