It had to happen. The summer sizzle fizzled throughout September according to the Okanagan Mainline Real Estate Board (OMREB) in their monthly sales report released last week.
Sales of residential homes throughout the Okanagan were down last month, from 1,020 in August to 884. That’s a drop of 13.3% from the previous month but still 25% more than the activity that took place in September 2015.
Board president Anthony Bastiaanssen says usually a slowdown indicates a move towards a more balanced market however considering how the high the temperature was in the market this year; an honest-to-goodness cool down will be very gradual.
Not enough listings and too many people looking
Sales are down but days on the market and selling prices remained consistent last month. Inventory remains low and fewer new listings hit the market and Bastiaanssen says there are still more buyers in Kelowna and area than there are homes to purchase.
Central Okanagan Stats
Of the three regions served by the OMREB, Kelowna and district is in the Central Region.
The average selling price of a residential unit in Kelowna last month was $493,833 which is an increase of nearly 14% over September 2015.
The number of new listings in Kelowna taken last month was 373 units, a very small increase of 1.62% over last year. The number of days that listing spend on the market on average dropped by 43% from 50 days to just 42 days. This is compared to 75 days the same time frame in 2015.
Buyer profiles in Kelowna
Families with children continue to make up nearly 30% of buyers in the Okanagan. Just over half of buyers come from within the region and 18% are first-time buyers.
Bastiaanssen said in his September report that the buyer profile hasn’t changed significantly in the six years that the OMREB has been conducting a survey.
He also stated that the 15% tax increase for foreign buyers in the Vancouver area has not yet impacted real estate sales in the Okanagan.
Missing from the September report was comment regarding the new mortgage rules for buyers whose down payment is less than 20% of the purchase price.
The new rules come into effect October 17 and affect the buyer’s ability to qualify for a mortgage if their down payment is less than 20%. Those buyers have to qualify at the Bank of Canada rate of 4.64% even if their loan eventually carries an interest rate of less than that figure. This new guideline is meant to be a “stress test” to help buyers better afford a new home purchase. It will also protect lenders against possible default of a mortgage should buyers get over their heads in household debt.
Kelowna & Area Sept 2016 Sept 2015 Change
Total Sales: 586 461 +27.11%
Total Sales YTD: 5,503 4,278 + 28.63%
Average Price $513,317 $438,104 +17.17%
Median Price $434,500 $395,000 +10.00%
Days on market (average) 42 75 -43.81%
Days on Market YTD: 56 74 -23.55%
New listings August 754 742 +1.62%