Double digit price increases in Kelowna’s housing market

Economic strength and in-migration from Lower Mainland contribute to strong seller’s market

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.”

Nationally, Canada’s residential real estate market saw strong, but slowing year-over-year price growth in the fourth quarter of 2017. The Royal LePage National House Price Composite, compiled from proprietary property data in 53 of the nation’s largest real estate markets, showed that the price of a home in Canada increased 10.8 per cent year-over-year to $626,042 over the three-month period.

When broken out by housing type, the median price of a two-storey home rose 11.1 per cent year-over-year to $741,924, and the median price of a bungalow climbed 7.1 per cent to $522,963. During the same period, the median price of a condominium appreciated faster than any other housing type studied, rising 14.3 per cent to $420,823 on a year-over-year basis.

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“To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability,” said Phil Soper, president and CEO, Royal LePage. “This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations.”

In line with Royal LePage’s previous Market Survey Forecast, Royal LePage predicts that the price of a home in Canada will increase 4.9 per cent by the end of 2018. Looking ahead, the company anticipates that the new OSFI stress test will slow the housing market in the first half of 2018, as buyers adjust their expectations and many market participants take a “wait and see” approach.

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“The unsustainably high rates of home price appreciation witnessed in recent years in B.C. and Ontario were dangerous to the stability of not only the housing market, but to the broader economy itself,” continued Soper. “Policy measures like the OSFI stress test will quell runaway housing inflation to an extent. However, we do foresee an upswing in demand in the latter portion of the year, as prospective buyers adjust to the new realities. To put it another way, the demand is still there.”

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kmichaels@kelownacapnews.com

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