Kelowna, a city known for its beautiful landscapes and tourist attractions, is currently experiencing a surplus of housing inventory. Realtors in the area, such as Jaime Briggs, have noted a significant increase in listings, with about nine months of inventory currently available. This surplus is attributed to slower sales in the spring and a lackluster tourism season that has impacted the local economy. The number of listings has increased by 17.8 per cent compared to the previous year, while residential sales have dropped by 12 per cent. Despite this, prices have only seen a slight decrease, with the average sale price down by 2.4 per cent.
Brendon Ogmundson, chief economist for the B.C. Real Estate Association, has pointed out that Kelowna’s housing market has been affected by a sluggish economy. The city’s economy, particularly the tourism sector, has been struggling for the past few months, leading to job losses and weaker housing sales. However, there has been a slight improvement in sales in recent months, indicating that the market may be stabilizing. With a surplus of listings, Kelowna is currently considered a buyer’s market, providing potential buyers with more options to choose from.
The new restrictions on short-term rentals that came into effect in May have also contributed to the buyer’s market in Kelowna. Many properties that were previously used as vacation rentals, especially condos, are now being listed for sale, causing a flooding of the market. Owners who relied on short-term rental income are now selling their properties as they are unable to operate under the new regulations. This has added to the inventory of available properties in Kelowna, further favoring buyers in the market.
Despite the recent interest rate cut by the Bank of Canada, which reduced rates by a quarter percentage point, industry experts like Briggs believe that it may not be enough to stimulate the market significantly. While the rate cut was expected to encourage more buyers to enter the market, Briggs does not believe it will lead to a significant increase in sales. Kelowna remains in a low-activity state, and buyers are not rushing to make purchases even with the lower interest rates. The market continues to be relatively slow, with some categories still experiencing multiple offers while the luxury market has a surplus of inventory.
Overall, Kelowna’s housing market is currently facing challenges due to a combination of factors including slower sales, a weak tourism season, and new regulations on short-term rentals. The city’s economy has been struggling, leading to job losses and a surplus of listings, making it a buyer’s market. While some categories still experience multiple offers, particularly entry-level properties, the luxury market has seen a significant increase in inventory. Despite the recent interest rate cut by the Bank of Canada, experts do not anticipate a significant boost in sales, and the market remains relatively stagnant. Buyers have more options to choose from in Kelowna’s current housing market, but the overall activity levels remain low.
