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WATCH: Waiting for housing prices to come down ? Don’t hold your breath

And don't just blame the influx of out-of-towners

  • What is driving the housing shortage in Kelowna?
  • When will the over-priced market calm down?

Even with the recent spike in mortgage rates, the Kelowna property market is not going to normalize any time soon, according to the president of the Association of Interior Realtors.

And don’t only blame all those folks resettling here from bigger cities or the work-from-home types, says Lyndi Cruikshank.

She said homebuying behavior – at either end of the age demographic - is playing a key role in the desperate housing shortage that is keeping prices unaffordable for many.

Kelowna is certainly not alone in B.C. in facing runaway prices the last two years, but the cost of a single-family home in the city has surged by a mind-boggling 69 per cent since before the pandemic.

A typical home valued at $670,000 in April 2020 hit $1,131,800 last month, according to the association’s latest monthly report.

The BC Real Estate Association figures it could take at least a year to get to a ‘balanced market,’ and Cruikshank said the most important factor towards eventually approaching some normality is getting many more properties built because the lack of supply continues to drive the imbalance.

“I don’t know that it’s going to happen as quickly as people want it to; at the end of the day, we need more homes,” Cruikshank told Kelowna10. “We need local government getting involved and supporting the initiatives that are coming forward from the developers we have in our communities.”

She said creating more housing options at all price points across the market, “will make a really big difference.”

The April stats show almost 35 per cent fewer homes were sold in the Kelowna area compared to April 2021. However, prices were still almost 13 per cent higher than a year ago.

The monthly increase of that single family home was a mere $2,800, compared to a $35,000 jump February to March, and a $56,500 spike January to February. That would suggest the explosion in prices has come to an end but Cruikshank would not predict what sort of increases are likely for the next 12 months.

She said while recent increases in interest rates were giving buyers pause for thought, the continuing extraordinary demand in Kelowna – which she said started back in 2016 - means there simply are not enough homes to meet the demand.

Changing expectations for older and younger homeowners

And, according to Cruikshank, the desperate lack of homes is not only a consequence of people coming to settle in Kelowna from larger cities, nor the pandemic-related influx of people deciding to embrace the work-from-home lifestyle options the area provides.

She said homeowner behavior has changed at either end of the age demographic.

“We are seeing people staying in their homes longer in life… and younger people are looking to buy that first-time home at a younger age now. We have a greater need for more housing from a purchasing perspective,” Cruikshank said.

The Interior Realtors Association April report shows the typical townhouse price slipped $3,900 to $754,200, while the cost of a typical condo was unchanged from the month before at $557,400.

Published 2022-05-19 by Glenn Hicks

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