Articles from Local Kelowna Newspaper

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These articles were in the local Kelowna Capital News this past week (March 10th & 12th, 2009)


Real Estate Market Rebound

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After years of being frozen out of buying real estate, young families are finally warming up to the idea of investing in property, says a study done by Re/Max.

The First-Time Buyers Report, which examines first-time buying activity in 32 residential housing markets across Canada, found improved affordability is prompting many first-time buyers to get off the fence, out of the rental, and into the market.

With a starter condo dropping tens of thousands of dollars over the last year, those who have maintained employment in this shifting economy are keen on getting a deal.

Quoted by an agent at Re/Max … “I thought the market would flatten out come spring time, but it’s turning around more quickly. The market came to such an abrupt halt, that you had to ask why. And I think it was a lot of the negative media from south of the border and the Canadian media jumped on the bandwagon.”



Housing Starts Dry Up

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In just one year, Kelowna has morphed from a city overwhelmed by the sound of construction to a more silent state.

Canada Mortgage and Housing Corp. reported a sharp drop in housing starts across B.C. in February, compared to the same month a year ago. In Kelowna, there were no multi-family unit starts, compared with 379 last February and there were just 11 single-family unit starts.

“It’s consistent with elsewhere across Southern B.C.,” said CMHC market analyst Paul Fabri. “Housing starts are down significantly because the construction sector is facing strong price competition from a well supplied re-sale home market. Also the inventory of new, complete and unsold units is rising.”

Builders, Fabri explained, simply aren’t going to build more until they get rid of the houses and condos sitting in their inventories.

Demand for resort homes and secondary residences are also expected to cool off as economies across North America take a hit.

During the upcoming year, Fabri doesn’t see things getting much better in the area of housing starts or sales—though he, like many other economists, are predicting 2010 will be the year for some rebounding. And he’s quick to point out that the current slowdown isn’t the end of days.

“Keep in mind that housing markets are cyclical, we are moving into a quieter cycle now where we are not seeing the huge growth in demand we saw over the past several years,” he said, adding that Kelowna is coming off a six year housing market upswing which makes for a skewed comparison.

“We’ve seen slow economic growth nationally, and we are not seeing employment growth. Both are down from exceptionally high levels of growth that we saw over the past several years. And of course that influences people’s decision to buy a home.”

While consumers’ decisions have been influenced by a faltering economy, the Okanagan Mainland Real Estate Board said more people are coming out of winter hibernation to buy.

While there were only 114 sales in January, there were about 162 in February. The total sales dollars of all properties sold in Febuary were up 51 per cent month-to-month.

“Realtors are reporting that February activity and interest picked up considerably,” said Brenda Moshansky, OMREB director. “Buyers are talking to mortgage brokers and bankers about getting pre-approved, recognizing the opportunity to take advantage of the lowest interest rate in history. Federal incentive plans such as the home renovation tax credit and the increase to the Home Buyer’s Plan from a maximum of $20,000 per individual to $25,000 for first-time home buyers to draw from their RRSPs for a down payment will also help sweeten the pot for buyers.”

Sweetened or not, Fabri thinks this city’s economy is diversified enough that it will come out of this downward cycle in good shape.

“It’s the nature of housing markets…there’s strong growth and demand, and when demand softens, the market takes a while to adjust,” he said. “The Kelowna area economy is in a better position to weather a slowdown than it was in previous (cycles.) Our economy is much more diversified now.”