Construction down, but local economic outlook isn’t all bad
Despite a construction slowdown and cooling real estate market, the Central Okanagan economy still has many bright spots. The Central Okanagan Economic Development Commission’s latest quarterly report shows eight of the 10 indicators tracked are still in the positive.
The indicators don’t take into account the impact recent wildfires have had on tourism and business.
The most dramatic drop outlined in the report is the 30.6 per cent plunge in the number of new home construction starts.
In the first half of the year, construction started on 1,287 homes of all kinds: singlefamily detached, townhouses, condominiums and apartments.
That’s down from the 1,855 starts over the same period last year.
Thus, the value of building permits issued has tapered off to $404.4 million from January through May, compared to $442.2 million over the same five months in 2017.
The report doesn’t include home sales, but the latest figures from the Okanagan Mainline Real Estate Board show sales in June were down 19 per cent to 484, compared to 595 in the same month last year.
In spite of the reduced activity, the average selling price of single-family home in the city in June was a near-record $716,000, up 6.5 per cent from June 2017.
A softening of home prices could be on the horizon as the market adjusts.
Two other housing indicators also remain strong.
The median price of a new home is $893,000, up 32 per cent in a year.
And, the average rent for a two-bedroom apartment is $1,151, up eight per cent.
Rent increases are expected to slow as the vacancy rate in the city jumps from 0.2 per cent to 2.5 per cent with many new apartments coming on stream from a rental building boom over the past couple of years.
The other six indicators that went up include population, household income, labour force, job postings business licenses and airport passengers.
Loop franchising
Get in the Loop, the deals-to-your-smartphone platform started in Kelowna, is on a worldwide franchising kick.
Loop started locally four years ago offering electronic coupons via app for everthing from golf, restaurants and wine to hotels, spas and salons, activities and attractions.
It has since expanded to other cities in Western Canada.
However, the future of Loop growth is now franchising, starting immediately with all of Canada.
Some cities have already been spoken for.
Franchisee fees for other territories range from $15,000 to $35,000, depending on size.
Franchising in the U.S. will start in the fall with global markets to follow.
Cliff Shillington, formerly of ReMax and familiar with that company’s successful franchising, is franchise expansion adviser to Get in the Loop.