There are plenty of ‘for sale’ signs in front of Kelowna homes these days.
“We have accumulated a lot of inventory over the last few months,” said Kelowna realtor Jaime Briggs. “Right now, we are sitting at about nine months of listing inventory.”
Briggs said there are several factors, including slower than normal sales this past spring and a lackluster tourism season this summer.
“The summer has really hurt us,” Briggs said. “We’ve seen a lack of tourism and a lack of people coming to the Okanagan and typically we get people coming here. They fall in love with the area, they want to buy here.”
According to a newly released report by Re/Max Canada, the number of listings in the area are up by 17.8 per cent from this time last year while residential sales have dropped by 12 per cent.
Prices have budged but only slightly with the average sale price across all property types down by 2.4 per cent.
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“There’s not a lot of activity happening,” said Brendon Ogmundson, chief economist for the B.C. Real Estate Association. “We’d much prefer for a balanced market with lots of listings, lots of sales and instead we’re in this market that’s trapped in this low activity state.”
According to Ogmundson, Kelowna has experienced lower housing sales due to a sluggish economy.
“The one thing that is true about Kelowna right now is that the economy there has been struggling for the last six to eight months. Tourism has been really affected, partly by short-term regulations, probably by other factors and so we have seen job losses in typical tourism sectors.” Ogmundson said. “Sales there have been pretty weak but it looked like they bottomed in the early spring starting to come up in the last few months.”
With a robust supply of listings, Re/Max Canada stated Kelowna is now a buyer’s market giving those looking to purchase more options.
“Interestingly, we are in a buyer’s market, and I say generally speaking,” Briggs said. “In some categories, though, the market is still tight, so in some of the entry-level product, we are seeing multiple offers still in that, but in the million-plus and higher luxury market, we have a lot of inventory out there.”
According to Re/Max Canada, the new restrictions on short-term rentals that went into effect in May are contributing to the buyer’s market with many properties, especially condos, once used as vacation rentals now listed for sale, flooding the market.
“People that owned those products and that they were renting are having to sell because they don’t want to go into long-term rental conditions,” Briggs said.
As to whether the Bank of Canada’s latest interest rate cut by a quarter percentage point is enough for more buyers to step up and scoop up all those properties, Re/Max doesn’t think so and neither does Briggs.
“We were hoping it would be more of a drop, but I don’t think it’s going to spur people, you know, and get them jumping up and down, off the fence,” Briggs said.
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