From their vacation home in Kelowna, Albertans can experience the kind of summer they often don’t enjoy at home. More sun, less rain, warm evenings well into the night and the lake. Lots and lots of lake.
So even though Alberta’s economy still isn’t great, home buyers from the east are still helping to drive Kelowna’s hot resale home market and providing new construction firms with plenty of business.
Checking stats from Canada Mortgage and Housing Corp (CMHC) for the first six months of 2016, there were almost 3,600 sales. The first half of 2015, there were just 2,700. The average selling price of residential property is $485,100 which is up over $55,000 compared to last year. Looking at new construction, the first half of this year there were 712 starts in all residential property sectors which is double the number of starts in the first six months of 2015 in the Okanagan’s largest city.
The Okanagan Mainline Real Estate Board (OMREB) notes that at the end of this six-month frame, the average selling price dropped ever so slightly and the number of days on the market actually spiked higher than the months prior. Despite these numbers, which could be completely attributable to a normal summer slow down in the seasonal ebb and flow of real estate, the OMREB says buyers still realize that listings are few and acting quickly on properties for sale is still a good idea.
Albertans continue to move the market along but the numbers are actually dwindling. Buyers from other regions in British Columbia are outpacing Alberta buyers. They accounted for approximately 17% of all sales the first six months of 2016 compared with 12% for buyers from Alberta which is a noticeable decline compared to previous years. In examining the Okanagan as a whole, from Sicamous to Osoyoos, Alberta buyers shrivel to 8% of the total residential activity.
But the largest representation of buyers in Kelowna is from within the Okanagan. OMREB says 60% of buyers are locals buying their first home, moving up to a larger more expensive property or down-sizing to a condo.
The small but mighty buyer force from Alberta is looking for recreational homes as an escape or for future retirement. Water’s Edge, a new construction development in Mission near the Eldorado Hotel, reports that 35% of Phase 1 was purchased by Albertans.
Other developments east of Kelowna believe half of buyers are from Alberta. It depends on the development, the location and the players involved.
No matter where the buyers in Kelowna and the Okanagan are originating, the real estate market is robust and the economy through out the province remains strong. If the price of oil were to bounce back to $100 a barrel once again, would the number of buyers from Alberta suddenly return to record numbers and how would the market in Kelowna react when the market goings from hot (without large numbers of Alberta buyers) to boiling?
It would make for an interesting forecast.