Via Kelowna Daily Courier (Original Article)
Despite economic uncertainty, it’s boldly predicted home sales and construction starts in Kelowna will remain stable through this year and next.
“Our forecasts take into account low oil prices and the ripple effect on Kelowna,” Canada Mortgage and Housing Corporation analyst Taylor Pardy said while in the city Wednesday.
That’s exactly the message the crowd of developers, construction suppliers, real estate agents, bankers and lawyers wanted to hear at the Canadian Home Builders’ Association lunch at the Coast Capri Hotel.
Low oil prices have hit Alberta hard and, as a by-product, Kelowna is nervous.
An estimated 5,000 oil patch workers call Kelowna home but commute to their jobs in Northern Alberta.
Some of those have since been laid off and are back in the Okanagan looking for work and driving up the unemployment rate.
Albertans looking for second, retirement and investment homes also account for up to 15 per cent of the home-buying and building activity in the Valley.
However, so far, that activity hasn’t abated as some Albertans have taken low oil prices as a cue to cash out of the industry and move to the Okanagan to retire or start a business and also buy a home.
Last year, construction started on 1,280 homes of all kinds (single-family, townhouse, apartment and condominiums) in Kelowna, a slight decrease from the 1,311 starts in 2014.
Starts are expected to climb to 1,400 this year and 1,420 in 2017.
Condo and townhouse construction is forecast to be particularly strong as first-time buyers look for more affordable alternatives to the traditional single-family home.
Some empty-nesters and retirees also like condos and townhouses as a downsizing and maintenance-free option.
Apartments will also make up a chunk of new construction as the vacancy rate remains low at 0.7 per cent and demand for rental units increases.
“The market is finding new balance and it’s stable,” said Pardy.
“Continued low mortgage interest rates and population and job growth continue to be the main drivers.”
The number of home sales of all kinds through the Multiple Listing Service in Kelowna last year hit 5,378, up substantially from 4,886 in 2014.
While sales are predicted to ease off a bit to 5,200 this year and 5,300 in 2017, it is still considered to be a balanced, stable and strong showing.
The 2008-09 recession took the wind out of Kelowna housing sales and prices, and it has been a long road to recovery.
But, as of 2014, sales activity was finally back up to pre-recession pace and the average selling price of a single-family home had returned to the $550,000 peak originally set in early 2008.
Canada Mortgage and Housing research consultant Elizabeth Tang told the crowd that as the population ages, developers should consider building what’s called FlexHousing.
“People want to age in place in their own home, so pre-wiring and pre-plumbing for future renovations to accommodate accessibility and adaptability is a good idea,” she said.