Kelowna home sales down 20%, says re­port

Royal LePage House Price Sur­vey adds to other re­ports show­ing cor­rec­tion in local hous­ing mar­ket

The Daily Courier - - OKANAGAN - By STEVE MacNAULL

The real es­tate re­set but­ton has been firmly hit in Kelowna.

The Royal LePage House Price Sur­vey for the fourth quar­ter is the lat­est doc­u­ment to point out there’s been a cor­rec­tion, a re­bal­anc­ing and re­cal­i­bra­tion in home sales and prices.

Ba­si­cally, the over­heated mar­ket has cooled. Sales are down 20 per cent com­pared with the past year, and the av­er­age sell­ing price is also down about 20 per cent com­pared to July’s record high.

How­ever, Royal LePage’s re­port takes a round­about way of get­ting there.

Ini­tially, the sur­vey shows the ag­gre­gate home price in the city in the fourth quar­ter at $650,438, up 3.6 per cent from the last three months of 2017.

Ag­gre­gate com­bines the av­er­age sell­ing prices of all kinds of hous­ing — sin­gle-fam­ily de­tached, du­plex, town­house and con­do­minium — to come up with one bench­mark.

Me­dian price is used for two-storey homes (up 2.5 per cent to $736,442), bun­ga­lows (up 3.3 per cent to $653,259) and con­dos (up 10 per cent to $421,512). That all sounds good.

Prices were up in the fourth quar­ter com­pared with a year be­fore.

But what the sur­vey doesn’t re­flect is the av­er­age sell­ing price of a sin­gle-fam­ily de­tached home hit a record high of $782,398 in July.

So, in re­al­ity, house prices are down dra­mat­i­cally in five months.

“Yes, when you look at those year-to-date fig­ures, prices are up,” said Dave Favell, one of the man­ag­ing bro­kers at Royal LePage Kelowna.

“But the mar­ket has slowed saleswise in the past six months, and prices have come down, too.”

De­spite the drops, Kelowna still has a healthy, bal­anced real es­tate mar­ket.

The mar­ket of early 2017 was over­heated, fu­elled by buy­ers from Van­cou­ver who sold their homes for $1.8 mil­lion and bought in Kelowna for half the price.

Since then, the Asian money flow to Van­cou­ver has dried up and the ef­fect has rip­pled out to Kelowna.

In ad­di­tion, mort­gage qual­i­fi­ca­tion rules have tight­ened, rock-bot­tom mort­gage in­ter­est rates have inched up and a provin­cial spec­u­la­tion tax was im­ple­mented.

Thus, Kelowna’s new mar­ket re­lies al­most solely on lo­cals, in­clud­ing first-time buy­ers, move-up buy­ers and down­siz­ers, and those who move here to re­tire or work.

“In the fourth quar­ter, the mar­ket in Kelowna re­mained bal­anced, re­flect­ing in­creased de­mand from young fam­i­lies and mil­len­ni­als look­ing to find a home for good value,” said Royal LePage Kelowna owner Fran­cis Braam.

“The hous­ing mar­ket is show­ing signs of sta­bi­liz­ing from the im­pacts of gov­ern­ment reg­u­la­tions aimed at cool­ing the mar­ket.”

Favell

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