2008 Spring Forecast

Another banner year for Kelowna real estate!

Kelowna's multi-family market is moving in new directions. We're seeing more, larger projects, many of which include low and high rise condominiums and townhomes. Mixed residential and commercial use projects are now commonly seen throughout our area. The Westbank area is experiencing a surge in multi-family construction as well. Pent-up demand and the building of new infrastructure such as the new bridge, new health care facilities and new retail services are key factors driving this demand. Buyers seeking resort and lifestyle-oriented units are commonplace and come from all over the world. Retirees and move-down buyers are also big sources of demand. Inventory for detached homes under $400,000 is dwindling so more and more first-time buyers are turning to multi-family housing.

There is an increasing demand for upscale housing and with rising lot and construction prices coupled with extended construction periods we've seen a continuation of upward moving prices. The year-to-date average price for a new detached home has now passed the $600,000 mark.

New construction has followed lot supply moving outward as municipalities extend infrastructure into new areas. Lake Country, North Glenmore, Black Mountain, Kirschner Mountain and Shannon Lake have recorded the biggest increase in detached construction activity.

Our healthy economy and employment growth has fueled in-migration and housing demands, not only in buying but renting as well. Investors from all over the world continue to come and buy in the Kelowna area and with a vacancy rate hovering at or near the 0% mark, rents are being driven up as well.

Kelowna continues to experience strong upward pressure on prices because of rising wages, growth in home equity, buyers seeking 2^nd or resort homes, and continuing low interest rates. These same reasons have also caused the supply of active listings to jump to a six year high. CMHC predicts that we can expect to see the pace of growth to begin slowing this year to about 3% as the market adjusts to rising supply. Continued international exposure including the 2010 Olympics, our highly desirable lifestyle possibilities, growth such as the airport expansion, the continuing construction at UBC, relative affordability compared to other areas, and all the high level services Kelowna provides will keep the attention focused right here, in our beautiful Okanagan Valley.

Please remember us when you're thinking KELOWNA REAL ESTATE!