Home prices buoyant for now
Kelowna sets new record high home price, but numbers down across Canada
It could be the light before the dark; the calm before the storm; the ascent before the slide; the stride before the stumble; the good before the bad.
This week, reports came out showing the average-selling price of a single-family home in Kelowna is at an all-time high and the median price of all types of homes was up in the first quarter.
On the surface, it’s continued positive news for a real estate market that’s been booming for four years.
However, looming over this joviality is the very real possibility the speculation tax, strict new mortgage rules and rising interest rates could bring it all to a crashing end.
“(It) could be the tipping point that takes the market from a gradual downturn to a potentially steep decline,” said Okanagan Mainline Real Estate Board past-president Tanis Read, a Realtor at Coldwell Banker Kelowna.
“When you tinker with the market, you can’t predict or control what will happen, nor can you put a halt to it.”
Board statistics for March, released this week, showed the average selling price of a single-family home was $734,197, a record that broke the high of $720,000 set a few months ago.
It’s a contrarian figure in a report showing the number of homes sales was down 27 per cent in March compared to the same month last year.
It seems a low inventory and people not affected by the speculation tax or new mortgage stipulations continue to buy and push up home prices.
However, the dramatic reduction in sales indicates a good number of potential buyers have been scared off.
Royal LePage’s house price survey for the first three months of this year this paints a cheery picture of median selling price of condominiums up 13.1 per cent, bungalows 12.1 per cent and two-storey homes 7.4 per cent compared to first quarter 2017.
“House prices are still up significantly on a year-over-year basis,” said Royal LePage Kelowna managing broker and owner Francis Braam.
“It will be interesteing to see what the taxes will look like and if the price increases continue as we enter the second half of the year. Buyers and sellers are feeling the effects of the speculation tax.
“The new regulations have caused a lot of uncertainty and concern for the market as a significant portion of prospective purchasers are from outside Kelowna.”
Royal LePage CEO Phil Soper went as far as to say: “We are experiencing a broad-based, residential housing correction in Canada, triggered by federal and provincial intervention.”
The Royal LePage survey puts the current median selling price of a condo in Kelowna at $411,827, a bungalow $636,279 and a twostorey at $714,357.
Home sales across the country have dropped in the wake of several government policy measures, including a stress test for home buyers with a down payment of more than 20 per cent, that were implemented to cool the country’s hot housing market.
Last March, national home sales activity had reached an all-time record for that month, according to the Canadian Real Estate Association.
The number of Canadian homes sold in March plunged 23 per cent and the national average price was down 10 per cent from the same month last year amid double-digit plunges in most housing markets across the country, according to sales data released Friday.