Kelowna Real Estate Market Report February 2022

For the buyers among you, I am sure you were wondering whether there is an end in sight to the rapidly rising Real Estate market we continue to see in Kelowna and the Central Okanagan area.

Unfortunately, the hot market looks set to continue, at least for the immediate future, which could be further fuelled by the widely anticipated rise in interest rates, (tipped to start in March 2022) as first-time and move buyers rush to get into the market, as housing affordability becomes an increasing problem.

Low inventory compared to demand remains the most acute cause, but we did see a marked increase in total Housing Starts, last month, which will begin to ease pressure over time.

Kelowna & Central Okanagan Real Estate Sales January 2022.

January 2022 Kelowna Residential Real Estate sales numbers were back up, after a dip in December.

Compared to the last month-:

– Total Sales were up 11.7% last month.

– Single-Family Homes sales were up 4%.

– Strata sales up 3%

Compared to last year -:

– Overall sales were down 23.2%

– Single-Family Home sales were down 13.4%.

– Strata sales were down 7.1%.

Kelowna Real Estate Inventory Levels January 2022

Finally, there was a modest uptick in listings last month.

Total listings in the Central Okanagan are now 902 up from 882 last month and down from 1,452 last year.

Single Family & Bare Land Strata Residential 298 units up from 292 last month and down from 422 last year.

Condo – 196 up from 188 units last month and down from 379 last year.

Town Homes – 95 up from 83 last month and down from 200 last year.

Traditionally, as we head into spring, in the Kelowna Real Estate market, we would normally see more properties to come onto the market, so it will be interesting to watch these figures into February and March.

Kelowna Real Estate Median Real Estate Prices – January 2022

Single Family Homes & Bare Land Strata

2022 $1,020,000 2021 $779,888 – up 30.8%.

Condos

2022 $485,000 2021 $360,000 – up 34.7%.

Townhomes

2022 $667,000 2021 $576,000 – up 15.8%

Have Kelowna Real Estate Prices reached their Peak?

I can understand Buyers starting to get anxious about whether the market has reached its peak.

Canadian & BC Economists are saying no, not yet, which, at our local level I totally agree with. More likely we will see much slower price growth in the 2nd half of the year, and it will be 2023 before we see a more balanced Real Estate Market.

1.Inventory – in Kelowna listings are still at an all-time low and competition is fierce between Buyers, judging by the continuing number of multiple offers (a number of which continue to be subject-free).

2. BC Economy – has been through a shaky spell but the outlook is looking brighter. Higher running inflation continues, BC Business confidence & Manufacturing output has fallen recently due to the Floods, Omicron, and continuing supply chain issues. Unemployment numbers are holding steady, & Housing Starts are rising,

3. Increasing Interest Rates – everyone is now expecting interest rates to start rising at the next Bank of Canada review in March 2022. In the short term, I am expecting this to cause an uptick in buyer demand as many buyers seeking mortgage qualification try to enter or move up in the market before they see qualifying rates rise and erode their affordability even further. In the longer-term, lack of affordability is likely reduce the number of Buyers.

4. Rental Vacancy Rates – we are continuing to see strong rental demand, and with the price of newer downtown one-bedroom units reported as asking up to $1800 p.m., some renters are now considering buying instead.

The Wild Cards which may affect the Kelowna Real Estate Market

1. Government Intervention – The Government is threatening to intervene to ‘cool’ the Housing Market in the Spring of 2022. Anti-speculation measures are on their radar, together with a ban on foreign buyers from purchasing non-recreational properties for two years; tightening down payment requirements for investment properties; tax gains on flipping properties, and curbing excessive profits on investment properties.

2. Covid pandemic / Consumer Confidence – we are all hopeful that we are in the final stages of the pandemic, however, if this were to continue, it is not clear how long some businesses may be able to continue.

For example, in the Okanagan, the Restaurant, Tourism & Sporting Sectors have been heavily hit. We are already seeing some Shops and Restaurants closing and if the pandemic continues this could have an effect on employment numbers and consumer confidence locally.

To counter this, a continuing ability to Work from Home is likely to see more migration from the Lower Mainland into more affordable markets such as Kelowna and the Central Okanagan.

3. The Effect of higher Interest Rates on Luxury Real Estate – Buyers in the Lower Mainland are likely to feel the effects of rising rates more intensely than those in less expensive markets, due to their higher Mortgages and Repayments. This may be a catalyst for them to seek a more affordable lifestyle in areas such as Kelowna and the BC Interior.

4. The Governments Immigration Policy – the Canadian Government has actively been pursuing higher immigration numbers. These are mainly skilled workers and entrepreneurs who are likely to initially rent in areas such as Vancouver, who will then become buyers. This could continue to fuel increased prices in the Lower Mainland, with a knock-on effect of encouraging more homeowners to ‘cash out’ and seek more affordable markets such as the Central Okanagan.

If you would like to receive specific information about your own buying and selling needs in the Kelowna & Central Okanagan area please call or email me and my current listings can be viewed at https://trishcenci.com/listings/trish-listings

Kind Regards

Trish Cenci

This month’s photo – Winter on Kelowna’s Downtown Waterfront.

Kelowna Real Estate Market Report February 2022

Compared to the last month-:

Compared to last year -:

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