Good grief, if you are anything like me, Kelowna’s current real estate market may be causing you feelings of nervousness, uncertainty or simply disbelief.
I find myself thinking thoughts like, really, $600,000 for a tear down? How are these prices possible? This market cannot be sustainable! My kids are never going to be able to own a home in Kelowna.
I’m willing to bet that many of you who have been looking to purchase real estate in Kelowna in past year have had similar thoughts. Whether you are looking for a primary home to call your own, or you are an investor looking to obtain a revenue or development property; the numbers just don’t seem to add up.
According to the Okanagan Mainline Real-estate Board’s statistics, the average price of real estate in Kelowna has increased 10 per cent since March 2016.
High demand and low interest rates are driving prices up in our beautiful city. How much longer can this go on? When a half million dollar price tag on a town home doesn’t even seem shocking any more I have to wonder, where it will end?
Since CMHC is insuring mortgages and offsetting bank risk, will our banks just keep lending more and more money to the average Canadian? When interest rates rise, and people default on their mortgages, the banks won’t be out of pocket, the consumer will be.
Is our economy on the verge of a downturn or is it as strong as it seems? We know BC exports such a lumber and coal (yes, I said coal – that is a whole other blog) are thriving and are the backbone of our stable economy here in BC. Perhaps, with this natural resource economic base, our growing post secondary institution infrastructure, a strong tourism and tech sector as well as a steady stream of people moving to the Okanagan from all over our country, we could be in for high land and home prices for the foreseeable future.
With all of these thoughts swirling in my mind I decided to ask some local experts. I spoke with my friend, Ted Rhind, a mortgage broker with Invis. I asked him what trends he was seeing in the lending industry. He stated that he has noticed more people co-owing homes together, whether it be with siblings, friends or parents. Also, he noted, more and more clients are looking for homes with suites. Interesting stuff; people are getting creative, looking for new ways to generate more income through renters or co-ownership in order to qualify or a mortgage.
I then asked the knowledgeable Terri Ann Novello, from Century 21, about her thoughts on the future of the local real estate industry. She predicted that Kelowna's real estate market will remain strong over the next 5 years. She has clients from the East to the West Coast of Canada. She told me she believes that as a strong community, we have to keep in mind not everyone can afford the average priced single family home. As a result she has noticed that our City Council and local builders have started to become creative so that buyers will be able to purchase a home in our community. She sees this innovation as essential in keeping Kelowna one of the best and most diverse places to live.
Again, our expert has provided us with some interesting insight. Novello speaks to the need for new and innovative solutions to keep housing options diverse and more affordable. Our current City Council does seem open to new urban planning concepts. Most recently, they created a four dwelling housing zone called RU7.
Perhaps it is time for even more forward thinking zoning options. A micro home zone that allows for smaller lot sizes to maximize land use for small, efficient, single family dwellings comes to mind. One of the biggest challenges faced by those wishing to follow the “little living” movement is with City zoning bylaws. Could our City become a model for innovative bylaws that allow people to live more affordably and with less environmental impact? I think I’ll ask them.