The Vantage Report 2017 Q3-Q4 Kelowna Real Estate by Vantage West Realty

R E A LT Y I N C .

Vantage THE

REPORT

Q3/Q4

We believe in the importance of families, building and improving communities, and in serving others. To that end we embrace the values of teamwork, creating joy in every situation, the mastery of our craft, placing our clients first, and creating stellar experiences for all. That’s who we are. And it’s what you can count on every time we do business, and life, together.

Believe WE

VA N TA G E W E S T R E A L I T Y. C O M

2017 OKANAGAN VANTAGE REPORT • 2

REAL ESTATE. RETHOUGHT.

That way, once you’re ready to invest,

elcome back to the

you’ll have the knowledge you need to

2nd edition of the Vantage Report. Our

mid-year Report con-

tained data collected from the Multiple Listing Service®, and we examined what

ONE THING IS FOR SURE: THERE ARE NO SIGNS OF GROWTH SLOWING DOWN.

make a sound decision. Our Report is published to help keep you informed. This issue will make its way into 20,000 households and onto more than 30,000 mobile devices. The Vantage Re-

those statistics meant for each of the

port would not have been possible with-

neighbourhoods. In much the same way, this issue also has detailed information

One thing is for sure: there are no signs of

out our guest columnists from the legal

on 15 different communities. We provide

growth slowing down.

and mortgage profession. I would also like

you with a snapshot of the latest data

This latest issue of the Vantage Report

to thank our research partner Knew Realty

and elaborate on what has occurred

highlights the construction of new condos,

Research Inc. and the incredible team here

during the last two quarters of 2017. The

townhomes and single-family properties.

at Vantage West Realty.

main difference between this issue and

We explore specific projects in detail,

our previous Report is that this edition is

and we also keep you updated on which

forward focused.

building proposals have been approved

The breathtaking region we call home

and will be breaking ground in 2018.

is now two years into a construction

Hopefully, after reading this report, you

boom. The landscape of the Okanagan

will have a better understanding of where

is changing and project by project,

your neighbourhood and our region is

investment in new home construction

headed. If you’re a homeowner, it doesn’t

is attempting to meet an insatiable

hurt to know what will end up on the

demand for property. It doesn’t matter if

construction site down the street. And if

you’re a little concerned about the pace

you’re still looking to purchase your first

of growth that’s occurring or if you’re

property, keeping up to date on what’s

excited every time you spot a crane.

happening in the market place just makes sense.

2017 OKANAGAN VANTAGE REPORT • 1

CONTENTS

2017 OKANAGAN VANTAGE REPORT

Nationwide average home sale price We break down the average home price and show you hard figures Province to Province.

16 10

INVESTOR UPDATE Why would anyone sell when it’s such a

Advice column

great time to be a landlord in the greater

AJ Hazzi talks about the new RU7 zoning

update for a look at what’s going on in

and what it means for Buyer’s looking to

Kelowna.

Okanagan? Check out our investor

DOWNTOWN Although this is one of the few areas where we actually saw an overall decrease in single family home prices, there is no shortage of activity happening downtown.

scoop a unit up or those who are considering re-developing an RU7 in 2018.

MARKET WIDE

Luxury market This year we have had an increasing number of strata titled properties entering the

Flip to page 15 to read about the Kelowna

luxury market, with some hitting over the

and Okanagan market overall. We discuss

million dollar mark.

the many drivers and influencers that are impacting our current market and what’s in store for 2018!

Read more about the aftermath of the

Overall, sales in Dilworth this past year

floods and our follow up on some of the

were even slower than 2016, but that

issues lakeshore property owners are

doesn’t mean they were necessarily

facing!

lower.

BLACK SWAN

2017 OKANAGAN VANTAGE REPORT • 2

dilworth

North glenmore/ glenmore Check out more details on the new home construction in this area, which lead the way in the region. With a massive 89% increase since 2016.

south east kelowna & crawford

university district

west kelowna estates

With the rise of UBCO it’s not surpris-

Demand is far outstripping supply in

ing that new home construction here is

West Kelowna, read more on page 44 to

mainly in the form of new student rental

see what’s driving this!

buildings.

With its gorgeous rural feel, it’s not hard to see why people love this area! However, that’s if you can afford it, with the average home price in 2017 hitting just north of $1 Million!

THIS LATEST ISSUE OF THE VANTAGE REPORT HIGHLIGHTS THE CONSTRUCTION OF NEW CONDOS, TOWNHOMES AND SINGLE-FAMILY PROPERTIES.

black mountain Despite growth in the earlier part of the

glenrosa

Sales in Glenrosa this past year were robust! Although still one of the most

Lake country

affordable areas, Q3 and Q4 saw the

Properties in Lake Country are always

to over $500,000!

average single family home sale price rise

highly sought after, and with the new single family construction we are poised to see, Buyer’s are going to have tons of opportunities.

year, Q3 and Q4 saw below average sales price increases for the region.

Lakeview heights

the year ahead

It’s not surprising to hear that Lakeview

Flip to the last page to see what 2018

Heights saw the steepest increase in av-

looks like for Kelowna and some of the

erage sale price with a very impressive

opportunities and potential pitfalls we

23.7% rise year over year!

might face! 2017 OKANAGAN VANTAGE REPORT • 3

O K A N A G A N V A N T A G E R E P O R T • Q 3/Q 4 • 2 017

MORTGAGE STATS

% %

% 2017 OKANAGAN VANTAGE REPORT • 4

2018 MORTGAGE MARKET OUTLOOK ERIK NORCOTT

LICENSED WITH VERICO, THE MORTGAGE ADVANTAGE

he second half of 2017 saw consistent growth in both benchmark and market-discounted mortgage

rates, following two hawkish Bank of Canada (BOC) interest rate hikes in July and September. Since then, the BOC has employed a wait-and-see approach to interest rate policy noting inflation measures that have remained well below their target rate of 2%. There exists a general caution towards the sustainability of a strong Canadian economic growth. While the BOC is currently giving no clear

ERIK NORCOTT, THE MORTGAGE ADVANTAGE

indication about when the bank might hike rates again, top Canadian banks are calling for real GDP growth to remain respectable by comparison to recent years. Inflation pressure rebounds are to become evident at some point in 2018; they will ultimately bring forth higher interest rates from the BOC. Amidst these expectations, Canadian mortgage rates should rise modestly throughout 2018,

change will cause 15% of potential Canadian homebuyers to either downgrade their mortgage spending expectations or postpone their purchase all together in 2018. For those affected that remain in the housing market the new qualification rules could mean cutting their mortgage affordability by up to 20%. In this case, the typical single income and dual income household in need of mortgage financing across the Central Okanagan will be shopping for homes in a price range of $244k to $322k and $515k to $740k respectively.**

eventually nearing levels that have not been seen since late 2013. Alongside growing mortgage rates, Canadian mortgage markets will also deal with the Office of the Superintendent of Financial Institutions

Erik Norcott Office: 778-940-8551 Mobile: 604-710-3871 Email: erik@assurancemortgages.com

(OFSI) decision to expand their mortgage qualification “stress-test*” to include uninsured mortgages to consumers, (with down payments 20% or greater than their home price) as of January 2018. According to the Canadian Association of Accredited Mortgage Professionals this policy

*The OFSI mortgage qualification “stress-test” rules now require the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada (presently 4.89%) or 200 basis points above the mortgage holder’s contractual mortgage rate. **Calculations were made with the assistance of ratehub.ca using 2016 median household income Statistics collected from StatsCan and an assumed 5-year fixed qualifying rate of 5.30% for 2018. Other caveats included no other forms of household debt and a 20% downpayment assumption. 2017 OKANAGAN VANTAGE REPORT • 5

E C O N O OMK AINC S AGAN

Q 3 /Q 4

O K A N A G A N VA N T A G E R E P O R T V A N T A G E R E P O R T • Q 3/Q 4 • 2 0 17

2017

ECONOMICS

T H E E C O N O M I C S B E H I N D K E L O W N A’ S R E A L E S TAT E B O O M THE ECONOMICS BEHIND KELOWNA’S REAL ESTATE BOOM

24 M O N T H S

22 MONTHS

18 MONTHS

PROPERTY PURCHASE DEMAND INCREASED RENTS

16 MONTHS

DECREASED VACANCIES 14 MONTHS

INCREASED RENTAL DEMAND

Days to sell down 14% on Townhomes and 6% on Condos.

INCREASED PROPERTY PRICES Average Single Family Home Sale Prices up 9%.

Median rent for 2-BDRM unit up 21% year over year.

Vacancy rate down to 0.2% in 2017 - the lowest in Canada.

More People Want to Rent.

12 MONTHS

POPULATION GROWTH Kelowna is Sixth Fastest Growing City in Canada.

3 MONTHS

JOB GROWTH Unemployment down 33% year over year.

GDP GROWTH 1 MONTH

#1 Entrepreneurial Region in Canada! Business licenses up 15.4% over 5 years.

Data Sources: GDP Growth - Central Okanagan Economic Development Commission, Economic Indicators Q1 2017. Data Sources: Job Growth - Statistics Canada, June 2017. GDP GrowthPopulation - CentralGrowth Okanagan Economic Development Commission, Economic Indicators - Statistics Canada, 2016 Census. Vacancies - Canadian Housing and2017. Mortgage Corporation, 2016/2017. Job Growth Decreased - Statistics Canada, July-November Increased Rents - PadMapper, 2016/2017. Population Growth - Statistics Canada, 2016 Census. Property Purchase Demand - Okanagan Mainline Real Estate Board (OMREB), 2016/2017. Decreased Vacancies - Canadian and Mortgage Corporation, October 2017. Increased Property Prices -Housing OMREB, 2016/2017.

Q3 2017.

Increased Rents - PadMapper, July-December 2016/2017. Property Purchase Demand - Okanagan Mainline Real Estate Board (OMREB), July-December 2016/2017. Increased Property Prices - OMREB, July-December 2016/2017.

2017 OKANAGAN VANTAGE REPORT • 6

ECONOMICS

O K A N A G A N V A N T A G E R E P O R T • Q 3/Q 4 • 2 0 17

CENTRAL OKANAGAN ECONOMIC OUTLOOK FOR 2018 (∆ from 2017)

POPULATION GROWTH 2.15% (Up from 1.62%)

UNEMPLOYMENT RATE

Down 33% year over year.

EXISTING HOME SALES

5,700 (No change from 2017)

AVERAGE HOME PRICE $552,000 (Up 4.0% from $530,950)

EMPLOYMENT GROWTH 1.51% (Down from 9.46%)

LOCAL WAGE GROWTH 3.00% (Up from 0.8%)

HOUSING STARTS

2,700 (Down from 3,100)

RENTAL VACANCY

2.50% (Up from 0.2%)

Source: Estimates and forecast data is averaged from baseline scenario outlooks for the Kelowna CMA area provided by the Canadian Mortgage and Housing Corporation (November 2017) and Environic systems (December 2017)

2017 OKANAGAN VANTAGE REPORT • 7

2017 OKANAGAN 2017 OKANAGAN VANTAGE VANTAGE REPORTREPORT • 7 • 7

NATIONWIDE

O K A N A G A N V A N T A G E R E P O R T • Q 3/Q 4 • 2 017

N A TI ONW I D E P R O J EC TED AV ER AGE HOM E S A LE PRICE 2018 The average national home price to contract minimally (-0.6%) in 2018 to

2018

$503,500 (CREA, September 2017). The Abbotsford, Kelowna and Victoria regions are poised to experience 4% growth in their average home prices in 2018, the strongest growth in amongst all major Western Canadian mar-

PRICE FORECAST

kets (the Canadian Mortgage and Housing Corporation, November 2017).

$242,200 NEWFOUNDLAND & LABRADOR

$305,600 QUEBEC

$191,900 PRINCE EDWARD ISLAND

$290,000 MANITOBA

$229,400 NOVA SCOTIA

$706,600 $173,700

BRITISH COLUMBIA

NEW BRUNSWICK

$402,300

$574,900

ALBERTA

ONTARIO

$289,900 SASKATCHEWAN

2017 OKANAGAN VANTAGE REPORT • 8

O K A N A G A N VA N T A G E R E P O R T • Q 1 • 2 0 1 7 O K A N A G A N V A N T A G E R E P O R T • Q 3/Q 4 • 2 017

DEMOGRAPHICS

W H AT D O B A B Y B O O M E R S WA N T I N A H O M E ?

47%

SOLAR PANELS/ ENERGY STORAGE

64% 80%

LARGE MASTER ARE MORE LIKELY TO WANT TOBEDROOM DOWNSIZE

66% 75%

WANT TO BE CLOSE TO A HEALTHCARE FACILITY NEW APPLIANCES

54% 87%

TWO-CAR OWN, OR ARE LOOKING TO OWN, GARAGE PROPERTY INVESTMENT

46% 49% 41%

LUXURY KITCHEN

47% 45%

PREFER A SINGLE FAMILY HOME

WANT TO DOWNSIZE FOR A SIMPLER LIFESTYLE

SOLID HARDWOOD/ STONE FLOORING

FINISHED BASEMENT

47% 38%

38% 66%

SMARTPREFER HOME A TOWN HOME OR CONDO SYSTEM

ABOVE-AVERAGE SAY THAT BEING CLOSE NEIGHBORHOOD TO FAMILY IS IMPORTANT

37% 68%

34%

OUTDOOR DECK (FIRST FLOOR) SAY THAT PROXIMITY TO SHOPS AND RESTAURANTS IS IMPORTANT

33%

LESS THAN 10 MILES FROM MAJOR CITY

34%

SAY THAT BEING NEAR A PARK OR RECREATIONAL AREA IS IMPORTANT

WANT TO BE LESS THAN 10 MILES FROM MAJOR CITY

4 BEDROOMS (ONE EXTRA)

BASIC OUTDOOR LANDSCAPING

LUXURY MASTER BATH

LESS THAN 25 MILES FROM MAJOR CITY

29%

31%

29%

30%

33%

87%

RECENTLY CONSTRUCTED (4 TO 10 YEARS) ARE DELAYING SELLING THEIR HOMES

25% 24%

OUTDOOR ENTERTAINMENT SAY THAT PROXIMITY SPACE TO PUBLIC TRANSPORTATION IS IMPORTANT

20%

ABOVE AVERAGE SCHOOL DISTRICT

25% 6% 09% 11%

EXTRA-LONG WANT TO BE CLOSE TO DRIVEWAY A COLLEGE OR UNIVERSITY

26% LUXURY LANDSCAPING

INGROUND POOL6% ARE LOOKING ONLY FOR A LARGER HOME

24% 1+ ACRES

Data Source: Online survey conducted by 1,333 Coldwell Banker real estate professionals across the United States regarding housing trends for Baby Boomers. Answer percentages do not total 100 percent, because respondents had the option to check all the apply. The most important take-a-way is the trends you see.

2017 OKANAGAN VANTAGE REPORT • 9

ADVICE COLUMN

KELOWNA’S NEW RU7 ZONING! By AJ Hazzi

WHAT TO EXPECT IN 2018 to buy these properties don’t want to sacrifice too much regarding space, parking

AJ HAZZI GIVES THE LOW DOWN ON KELOWNA’S NEW RU7 ZONING AND WHAT TO EXPECT IN 2018.

and other extras. But getting the balance right for developers and consumers is not an impossible task. In 2017 we saw approximately 50 of these properties change hands and this year about 50 more will sell. That said, more than three-quarters of the lots which adopted the new RU7 zone have yet to be developed. Some people have argued that the re-zoned lots are already on the small side as the original homes were relatively tiny when

he new RU7 zoning in the downtown area was designed to encourage those living in

the suburbs to move into the urban core. An exciting array of properties not previously available are allowing buyers from different age demographics to find homes that suit

compared to many areas of the city. And the 25x60 lots are indeed lacking in size when compared to lots in other neighbourhoods. Concerns that the multi-family properties are spaced too closely together may appear to be a sound argument for some members of the public who frown on the development of more units. But those who make these claims ought to simply observe what we see happening in the Kelowna property market and remember that for some consumers, these homes are a relative bargain.

their lifestyles. These downtown properties are close enough to walk to almost everything you need and cycle to most of your favourite destinations. As more people move to the core, businesses that cater to these new homeowners will, in turn, encourage more consumers to move and take advantage of living downtown. Increasingly, those considering homes in the $500-800K range are purchasing properties in the most urbanized area of our city and parking their cars more often. They also have the difficult job of satisfying consumers who are resistant to giving up comforts that many take for granted while living in the suburbs. Those who can afford Photo Source: City of Kelowna 2017 OKANAGAN VANTAGE REPORT • 10

2017 OKANAGAN VANTAGE REPORT

Those who are looking to purchase properties in the downtown core view units being

Q3/Q4

PROPERTY BEFORE DEVELOPMENT:

built in RU7 zones and compare them with townhomes and condos elsewhere in the city centre. Buyers know that if they desire to live in a downtown high-rise, they’ll be looking at spending $600/ sq ft. And if they buy units in multi-family infill developments, they’ll enjoy paying the considerably reduced price of about $400/sq ft. These purchasers will also enjoy the dual benefit of owning all four walls and the roof over their heads, while living amidst the action and convenience of the urban core. As more consumers and infill developers get used to the new changes, we expect to see considerably more of these lots developed. For those who are considering re-developing an RU7 property in 2018, here is a very basic look at the economics: Average unit value $600,000 x 4 = $2,400,000 Construction @ $200/sqft x 6K

- $1,200,000

Development Costs approx 5%

- $120,000

Selling & Marketing costs 5%

- $120,000

Developers Margin of 15%

- $360,000

AFTER REDEVELOPMENT:

Land Value of Ru7 Lot = $600,000 *Retail Value of the units based on $400/sqft and an average of four 1500 sqft 3 bedroom units:

BUILDING ON SMALL, EXPENSIVE LOTS WHILE TURNING A PROFIT REQUIRES SMART DESIGN 2282 square feet sold in 2016 for $882,000 each.

2017 OKANAGAN VANTAGE REPORT • 11

MARKETWIDE

Y E A R OV E R Y E A R C H A N G E BY P R I C E %Chg (yr)

2017

2016

Single Family

$735,523

$675,838

8.8%

Townhouse

$461,742

$423,163

9.1%

Condo

$329,522

$289,713

13.7%

Price per sq/ft

$290.72

$262.26

10.9%

Market wide

PPEE RRCCEENN TAEGOEF U S NOILT D TAG S SO BY H OLUD SBIYNTGY PTEY P E

Single Family (54.4%)

Condo (28.6%)

Townhouse (16.9%)

This graphQ3-Q4 shares the marketwide Data Source: OMREB 2017 total sales look by housing type. at the types of units sold during Q1 & Q2 2017 in Kelowna.

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

MARKET WIDE: AVERAGE SINGLE FAMILY HOME PRICES 900K

600K

300K

0K 2013

2014

2015

2016

2017

Data Source: OMREB - Average annual single family home prices, July 2013 - December 2017.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 12

2017 OKANAGAN VANTAGE REPORT

Q3/Q4

s we discussed in our Q1 - Q2

vices and other health assistance industries have helped keep Kelowna property

Report, the continued influx of

a top pick for retirees. Net migration into the Thompson-Okanagan region was

local baby boomers into the

4,200 in 2016. However, more often than not these days, those who are moving

strata market is changing the

here aren’t ready to retire, and it’s not our more conventional industries that are

landscape of our city. The dream of retiring

attracting them.

in British Columbia, and in particular the

The main draw for newcomers is our business-friendly environment and our

lower mainland, is a desire for many Cana-

competitive strengths in several industries. Kelowna and the Central Okanagan

dians and now more than ever, boomers

have rapidly become one of the nation’s fasting growing communities while

are setting their sights on Kelowna and

British Columbia has emerged as a national economic leader. Accolades were

Victoria. And while the majority of home

given in 2017 when the Canadian Federation of Independent Businesses named

buyers are from within our region (over

our humble city Canada’s top entrepreneurial community. Backtracking on the

55% From January - November 2017), over

‘humble’ comment, we also live in one of the smartest communities in the world

18% were from the Lower Mainland, and

(the Intelligent Community Forum). And we keep getting smarter – post-sec-

close to 11% were from Alberta last year.

ondary enrolment is up, and the University of British Columbia attracts gifted

Consumers from other Canadian provinces

students who often remain in our region after graduation. It’s no surprise that

and overseas investors made up the re-

with our demographics, our area is becoming a hub for innovation and business

maining 16% of home purchasers

formations. Young families are bringing vibrancy to our area as 29% of homes

As a whole, the resale market remained

last year were sold to two-parent families with children. Couples without children

tight through the second half of 2017.

purchased 22% of the properties sold while ‘empty nesters’ and retirees made up

Although prices in some areas remained

19% of home buyers. Renters in Kelowna have had it tough for several years. In fact, Kelowna has

TIGHT SUPPLY SHOULD EASE IN 2018, OPENING INVESTMENT OPPORTUNITIES

the unenviable reputation of being the hardest place in Canada to find a rental property. 2018 should provide at least some relief. As units currently being constructed come on the market, property investors will be looking for reliable tenants to fill them. The completed units should lessen competition for space in our city. A healthy vacancy rate is considered to be around 4%, but it has been a very long time since we’ve seen vacancy rates that high. A change could be

flat, for most neighbourhoods, the last two quarters of 2017 were much the same as the first two. Demand for homes continued to dwarf supply and multiple offers on homes tormented would-be buyers. There were massive hikes to the average sales price in many areas including Lakeview Heights where the price increased by 23%. In 2018 the increase in inventory coming on the market should ease the tight supply and allow for more opportunities for investment in property. Our region is well-known for our worldclass agritourism industry, outdoor recreation experiences and as one of the best places to retire in Canada. Consistent investment in senior accommodation ser-

2017 OKANAGAN VANTAGE REPORT • 13

MARKETWIDE

O K A N A G A N V A N T A G E R E P O R T • Q 3/Q 4 • 2 017

just around the corner though. The full impact of new rental units should be seen in the next 12-16 months as more of these homes are completed. The Central Okanagan Economic Indicators report for Q3 2017 showed encouraging job numbers. There

WONDERING HOW YOUR COMMUNITY STACKS UP AGAINST THE REST? and stable housing market. Take a peek at the chart below to see how the growth in average single family home prices year over year.

Community

2017

2016

%Chg (yr)

were 4,109 jobs posted in Q3, and the unemployment rate in our region from

Westbank

$550,760

$435,089

26.6%

Lakeview Heights

$1,030,619

$834,707

23.5%

SE/Crawford

$1,104,203

$943,470

17%

Rutland

$543,292

$464,496

17%

Shannon/Smith

$674,487

$580,375

16.2%

Glenrosa

$519,143

$457,385

13.5%

Glenmore

$675,546

$610,788

10.6%

Lake Country

$812,665

$743,351

9.3%

Dilworth

$832,096

$767,237

8.5%

West Kelowna

$653,511

$606,963

7.7%

Black Mountain

$690,541

$646,160

6.9%

Peachland

$624,347

$588,429

6.1%

University

$736,643

$702,583

4.9%

Mission

$933,587

$1,001,381

-6.8%

Downtown

$682,257

$734,154

-7.1%

January to September 2017 was 5.2%. The latest Income Census released in September 2017 also shows that the average income for the Kelowna CMA (Census Metropolitan Area) was $71,127. The types of jobs people secured in our region were in most cases full-time. Positions in construction, finance, real estate, manufacturing and government services were the most common industries where people found work. Those looking to settle in the Kelowna area are primarily from B.C. – specifical-

STRONG EMPLOYMENT IS EXPECTED INTO 2018 ly the Lower Mainland and Vancouver Island. New residents who moved to the Kelowna region in 2017 benefited from one of the lowest jobless rates in the country. Those who sought work in industries which are currently experiencing skill shortages had eager employers offering good pay. The regional labour market in Kelowna is projected to see strong employment numbers in 2018 while sustaining low levels of average unemployment. This growth should support real income increases and create the environment for a more balanced

2017 OKANAGAN VANTAGE REPORT • 14

O K A N A G A N V A N T A G E R E P O R T • Q 3/Q 4 • 2 017

BLACK SWAN

LAKE OKANAGAN’S NEAR-HISTORIC FLOODING: THE AFTERMATH By AJ Hazzi

he near-historic flooding that occurred in 2017 caused many

larger and older docks which were recently destroyed did just that. In the past, the issue of access has been somewhat openly ignored and older,

Okanagan homeowners big

non-conforming docks have been allowed to remain standing. Grandfather claus-

headaches. But for property

es were put in place, and lakeshore homeowners were allowed to keep their pic-

owners who had specially protected private

turesque docks but on one condition. The structures could not be replaced. This

docks, the impact of the flood was partic-

preferential treatment allowed many homeowners on the lake to keep structures

ularly devastating. The Province estimates

that would have been illegal if not for special protections given by the province.

that as many as 1,500 docks were damaged

And then in 2017, the flood happened. For home buyers who were in the process

or destroyed as a result of the flooding. And

of closing deals on their lakeshore homes, the flood was especially hard to accept.

for the homeowners affected, a key feature

In some cases, prospective buyers tried to back out of deals after learning that

of their home is lost forever.

one of the major selling features they were paying for was now under water. Several parties have turned to lawyers to sort the mess out, but both prospective

FOR THE HOMEOWNERS AFFECTED, A KEY FEATURE OF THEIR HOME IS LOST FOREVER

purchasers and homeowners are going to have trouble finding anyone to blame other than Mother Nature. The situation has already had a dramatic impact on lakeshore properties, and 2017 was a much different market than the previous year. Many of the homes with destroyed docks look significantly less attractive than they did before the flood and there is no doubt that property values have been impacted. In 2016 there was over $155 Million worth of lakeshore home sales with an average selling price of

A large percentage of the docks and

$1,330,619. This past year, only $100 Million of property sold on the lakeshore and

boathouses that were destroyed in the

the average selling price had dropped to $1,087,330.

flood were located along the foreshore of

The City and the Province are focussing on avoiding a repeat of this disaster.

Okanagan Lake. The foreshore is essentially

There are clearly, well laid-out guidelines that instruct homeowners on what dock

the land between the high and low water

construction is acceptable. Most dock builders understand the existing rules and

marks. This area is owned by the provincial

won’t start working without the proper documentation, permits and licensing. It

government, and as provincial land, there is

may take a while for home prices on the lakeshore to recover, but when they do,

a rule in place that states it is illegal to block

at least we’ll know the new docks will be there to stay.

access to it. Unfortunately, many of the 2017 OKANAGAN VANTAGE REPORT • 15

INVESTOR UPDATE

WHAT IS THE GROSS RENT MULTIPLIER? Gross Rent Multiplier is the ratio of the price of a real estate investment to its annual rental income before accounting for expenses such as property taxes, insurance, utilities, etc. A 15 GRM calculated on annual rents suggests the gross rent will pay for the property in 15 years. When you multiply the monthly income of a property by a standard GRM you can produce a rough estimate of the property’s value. For example, take a look at the chart below:

GROSS RENT MULTIPLIER 18

10 2012

2013

2014

2015

2016

2017

2018

A property that produces $2500/mo in rent or $30,000 annually x GRM of 15 = $450,000

2017 OKANAGAN VANTAGE REPORT • 16

2017 OKANAGAN VANTAGE REPORT

Q3/Q4

t was a highly competitive year for investors looking for prop-

erties with high rates of return. Most decent rentals that were

listed didn’t stay on the market long and small, multi-family units saw big price gains. In all of the Central Okanagan, there were less than 50 multi-family properties sold. Of these properties, 26 were duplexes, and another 16 were fourplexes. Less than 5 apartment build-

AS THESE RENTAL PROPERTIES COME ONTO THE MARKET, WE EXPECT TO SEE VACANCY RATE INCREASE A LITTLE

ings in the region changed hands. And why would anyone sell when it’s

Landlords would do well to consider making upgrades to their properties now

such a great time to be a landlord in the

before newer, amenity-rich units offer consumers better options.

greater Okanagan. The tech sector and

For many people who have been waiting to save up for a down-payment on

University attract young renters and

a home, the wait will take a bit longer starting this month. The new mortgage

seniors make up over 20% of people

stress-test begins to take effect this month. For many, these new rules will have

living in Kelowna. The rental vacancy

the unintended consequence of keeping would be homeowners in the rental

rate this past year was well below 1%,

market. Unfortunately, as future buyers continue to put money away, the aver-

and rents in the Okanagan have risen

age sales price creeps steadily higher.

steadily. Older apartment buildings can be acquired for

IT’S A GREAT TIME TO BE A LANDLORD IN THE OKANAGAN

5-BEDROOM HOMES W/ SUITES, AVERAGE SALE PRICE 800K

600K

$85-90K per door, and Kelowna’s Rental Housing Grants program disburses $320,000 annually to encourage the

500K

construction of purpose-built rental housing. The Grant program appears to be having

400K 2012

2013

2014

2015

2016

2017

some effect as we’ve seen an increase in rental stock building permits. Many

Data Source: OMREB - Average annual sale price, January 2012 - June 2017.

of the 1 and 2-bedroom units that will be constructed this year fall under the affordable housing initiatives that the municipality laid out back in 2016. Significant incentives were offered to developers for building affordable units. As these rental properties come onto the market in the next 12 months, we expect to see the vacancy rate increase a little

THE RENTAL VACANCY RATE THIS PAST YEAR WAS WELL BELOW1%

which will give some relief to renters. 2017 OKANAGAN VANTAGE REPORT • 17

R E A LT Y I N C .

GOOD FORTUNE NOT CUTTING INTO YOUR BOTTOM LINE IS THE KEY TO

in property management

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> Free Analysis on properties you currently own – Full Pro Forma, Financial Projections, Sale analysis and more.

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REAL ESTATE SALES: Access to our sales division for guaranteed sale on any properties you wish to sell.

> Inhouse Maintenance and Renovations Crew. > Experts in maximizing rents without creating vacancy. > Specializing in Residential, Single family and Multi-Family. > Gold REIN 2015, Multi Family 2016, and Top Player 2016 award winners following REIN principals.

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PHONE 250-868-3151 EMAIL INFO@PROPERTYMANAGEMENTKELOWNA.COM WEB WWW.PROPERTYMANAGEMENTKELOWNA.COM TRADEMARKS ARE OWNED OR CONTROLLED BY THE CANADIAN REAL ESTATE ASSOCIATION (CREA) AND IDENTIFY REAL ESTATE PROFESSIONALS WHO ARE MEMBERS OF CREA (REALTOR®) AND/OR THE QUALITY OF SERVICES THEY PROVIDE (MLS®).

Parkside at Clifton Road - 1293 Modern Place

LUXURY MARKET

LUX YY M AMREKMEATR KSEA L UUXR UR HO T LES Y S TY P EG T Y P E B Y H OB U IN CONDO (1.7%)

LAKESHORE (11.9%)

TOWNHOUSE (0.6%)

ACREAGE (23.3%)

EXECUTIVE (62.5%)

Data Source: OMREB Total 2017 luxury listings This graph highlights the-Q3/Q4 state of theand sales by housing type, July December market wide luxury home-market in 2017. Kelowna, by type of home.

Data Source: Photo from Vantage West Realty Inc. 2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 20

2017 OKANAGAN VANTAGE REPORT

Q3/Q4

n our last issue, we talked about an increasing number of strata titled

LUXURY MARKET: AVERAGE DAYS TO SELL

properties entering the luxury market. Recently we have seen penthouses, and

225

sub-penthouses sell in the downtown core for well over a million dollars. A 2,157 sq. ft. sub-penthouse recently sold for $1,569,000 which works out to $727/ sq. ft. There was also

150

a $1,450,000 sale on Landie Road which was the first in Lower Mission to achieve a sales price of over a million dollars. Townhomes in

Lower Mission are now consistently crossing over the $1000/ sq. ft. mark.

WE HAVE SEEN PENTHOUSES, AND SUB-PENTHOUSES SELL IN THE DOWNTOWN CORE FOR WELL OVER A MILLION DOLLARS.

0 2013

2014

2015

2016

2017

Data Source: OMREB - Average days to sell, July 2013 - December 2017.

Developers appear to be increasingly eager to view Kelowna as a key market for luxury strata homes and several projects including 1151 Sunset Drive, Ella and One Water Street are catching the affluent buyers attention. One Water Street has sold over 75% of the total units in their first tower which includes two out of nine sub-penthouses. Features such as an elevated 1.3 acre landscaped park,

LUXURY MARKET: NUMBER OF SALES JULY-DECEMBER 225

private gym, dog run, two swimming pools, an outdoor hot tub and BBQ space is evidently appealing to millennials who have long wish lists. Those looking to downsize are attract-

150

ed to high-end homes in centrally located, lively neighbourhoods and these consumers have appreciated what 1151 Sunset and Ella

have to offer. Sub-penthouses in 1151 start at $1,399,900 and are priced between $2,026 2,157/ sq. ft. A hybrid, hotel and luxury strata property is also currently in the planning stag-

0 2013

2014

2015

2016

2017

es. This 32-story tower will contain 174 hotel rooms along with 49 high-end residences.

Data Source: OMREB - Total number of luxury home sales, July 2013 - December 2017. 2017 OKANAGAN VANTAGE REPORT â&#x20AC;˘ 21

DOWNTOWN KELOWNA CORE

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

97.6%

$494,571

+1%

+30%

+23%

+18%

-0.6%

-4%

303

211

4.3

List/Sell Ratio

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

59%

*Townhouse

24%

**Condo

346

204

70%

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 22

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

n 2017, construction on Kelowna’s

prestigious ‘1151 Sunset Drive’ tower

Downtown

2017

2016

%Chg (yr)

resumed. Only one other condo tower is currently under construction in the

Single Family

$ 682,257

$734,154

-7.1%

Townhouse

$ 509,187

$ 440,717

15.5%

Condo

$ 387,471

$ 381,016

1.7%

Price per sq/ft

$ 365.81

$ 345.86

5.8%

Central Okanagan region and that is ‘SOPA Square’ in ‘Pandosy’. Three other tower projects named ‘Ella’, ‘Ellis Parc’, and the South tower of ‘One Water Street’ should all break ground in 2018. Each one experienced very successful pre-sale campaigns in the Fall of 2017. A variety of units from micro-suites to penthouses are on offer and prices range

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

from the mid $200K’s to the high 2-Millions. In Spring 2018, the new ‘URBANA’ low-rise condos at Central Green will offer pre-sale units from the high $100K’s to the mid$200K’s.

the low to high $500K range. There are also top end townhomes available priced from the high $500K’s to the high $900K’s. We continue to see high demand for detached single-family home infills. Consumers are particularly interested in Kelowna’s North Knox Mountain area where single detached homes are sold from $600k to the low $1 Millions.

WE CONTINUE TO SEE HIGH DEMAND FOR DETACHED SINGLE-FAMILY HOME INFILLS. New home construction in Kelowna’s Downtown Core was steady in 2017, especially along Highway 97. There was a 22.7%

HIGHEST SALE Q3/Q4: $2,890,000

increase in all new listings (excluding lots) and a modest 1.3% increase in sales year over year. The average days on market for units has increased by 17.8%, and there has been no notable change in the average sales price. Condos sales have risen the

Data Source: OMREB.

DOWNTOWN KELOWNA SINGLE FAMILY HOME PRICES 900K

most with 180 units sold, an increase of 11% year over year. The average inventory and months of supply available are up 31%

600K

and 40% respectively. Average sales prices for Downtown condos experienced a very modest 1.75% rise year over year.

300K

The City of Kelowna’s RU7 Infill Challenge has led to the construction of several 4-plexes across the Downtown Core. Consumers looking to purchase a family home

0 2013

2014

2015

2016

2017

will have some new options in 2018. Pre-sale townhome-like units are available in

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 23

2017 I Q3/Q4

OKANAGAN VANTAGE REPORT

n the next few years, we will see

much more construction in Lower

Mission

2017

2016

%Chg (yr)

and Upper Mission. There are

several planned condo devel-

Single Family

$ 933,587

$ 1,001,381

-6.8%

Townhouse

$ 611,662

$ 577,774

5.9%

Condo

$ 329,889

$ 317,891

3.8%

Price per sq/ft

$ 314.44

$ 320.44

-1.9%

opments in Lower Mission including sizable projects along Lakeshore Road. Currently, there are nearly 600 units under various

stages of development review with the City of Kelowna. Ongoing renewal continues in mature neighbourhoods along Lakeshore Road where new single-family homes are on offer in the 1.5 Million to 2.5 Million range.

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

Overall there were fewer sales of all types of

the ‘Green Square Vert’. Prices start as low as $239K for apartment style condos

residential homes this past year. The average

and $339K for townhomes.

sales price for single-family homes declined

Albertans and those from Vancouver continue to look to Lower and Upper Mission

by 6.8%. The total sales of townhomes

for the ideal lifestyle. The Upper Mission neighbourhoods of ‘The Ponds’ and ‘The

decreased by 21.9%, and apartment style

Vistas of Kettle Valley’ saw active pre-sales in 2017. Prices currently range from

condos saw a 14% decrease in sales along

$800K to $2-Million.

with a 41.4% increase in days on market (now 41 days). However, the market did experience a 5.9%

OVERALL, TOTAL SALES HAVE DECREASED YEAR OVER YEAR. increase in the average sales price for town-

HIGHEST SALE Q3/Q4: $3,675,000 Data Source: OMREB.

homes this past year (currently $611,662) which was coupled with a significant 23.8%

LOWER/UPPER MISSION SINGLE FAMILY HOME PRICES

decrease in the days on market (now 48 days). There was also a modest 3.8% in-

900K

crease in the average sales price for condos and investment in new homes continues to remain steady. The construction of townhomes in 2017

600K

was a response to the strong pre-sales that occurred in 2016. This past year, pre-sale townhomes were limited to the ‘Gyro Beach

300K

Townhomes’ in Lower Mission where prices currently start from the high $800K’s. However, this year, consumers will once again have the opportunity to buy pre-sale town

0 2013

2014

2015

2016

2017

homes and apartment style condos within Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 24

LOWER MISSION/UPPER MISSION

Annual Record 313

228

4.2

Sales

Average Inventory

Months of Supply

Days to Sell

-11%

+21%

+24%

+6%

97.6% $666,001 Average Sale Price List/Sell Ratio

+0.1%

-0.1%

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

151

122

24%

*Townhouse

133%

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 25

DILWORTH

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

List/Sell Ratio

98%

$773,113

-39%

-6%

+205%

+29%

+0.03%

+12%

6.1

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 26

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

verall, sales in Dilworth this past

year were even slower than they

Dilworth

2017

2016

%Chg (yr)

were in 2016. In the past 12 months,

there were 34 sales versus 56 for the previous

Single Family

$ 832,096

$ 767,237

8.5%

Townhouse

$ 657,500

$ 584,143

12.6%

Condo

$265,878

$292,350

-9.1%

Price per sq/ft

$ 248.10

$ 228.55

8.6%

year. The average days on market rose by 29%. For townhomes, in particular, there was a 64.3% decrease in the number of homes sold. Only five townhomes changed hands this past year. A mere four, apartment style condos sold in 2016, and last year, it was even fewer. Just two sold. Dilworth also saw the steepest decrease in new listings year over

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

year.

PAST ZONING RESTRICTIONS HAVE LIMITED DEVELOPMENT IN THE PAST, BUT THIS COULD BE CHANGING Dilworth property continues to be a highly sought after for obvious reasons, but opportunities to own in this area are relatively scarce. Past zoning restrictions have limited development in the past, but this could be changing. And if it does, it will likely be quite soon. The number of building permits in Dilworth rose substantially in 2017, and it looks

HIGHEST SALE Q3/Q4: $1,500,000 Data Source: OMREB.

as though there will be new opportunities to purchase property in 2018. Most recently, the City of Kelowna approved the re-zoning of agricultural land located at McCurdy Road. This parcel would accommo-

DILWORTH SINGLE FAMILY HOME PRICES 900K

date the development of multi-family townhomes as well as apartment style condos. We’re confident there will be no shortage

600K

of interest from those looking to move to or invest in such a desirable neighbourhood. A new rental development broke ground

300K

along Enterprise Way this past year at the base of Dilworth Mountain. This most recent investment led to a further boost in prices for new homes in the area. It will be interesting

0 2013

2014

2015

2016

2017

to see the renewal in the Dilworth community that is likely to take place going forward.

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 27

GLENMORE & NORTH GLENMORE

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

List/Sell Ratio

98%

$519,889

-9%

+19%

+39%

+14%

-1%

+16%

268

130

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

Single Family

189

100

89%

*Townhouse

-6%

**Condo

%Chg (yr)

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 28

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

lenmore has continued to

experience healthy sales price

Glenmore

2017

2016

%Chg (yr)

increases this past year with the average price of all homes

Single Family

$ 675,546

$ 610,788

10.6%

Townhouse

$ 461,213

$ 398,450

15.8%

Condo

$ 289,110

$248,403

16.4%

Price per sq/ft

$ 275.85

$ 237.38

16.2%

rising by 15.8%. There has continued to be strong demand for townhomes and apartment style condos. In the past 12 months, we saw an increase of 15.8% in the average sales price for townhomes and condos saw an even higher increase – an impressive 16.4% rise. In contrast, the average sales price for single-family homes experienced a

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

more modest 10.6% rise. The new home construction in Glenmore this past year led the way in the region. From January to November 2017, there was $166 Million worth of building permits approved. Most of the activity took place in the newly developing North Glenmore communities of ‘Wilden’ and ‘McKinley

year, and we expect these new figures to become the norm in 2018. Only one project in Glenmore offered pre-sale condos, and that was the luxurious ‘Granite’ project in ‘McKinley Beach’ where prices currently start at $399K. Consumers looking for pre-sale townhomes may be in luck in 2018. A major multi-family mixed-use development project is currently under construction at the corner of Glenmore Road and Summit Drive. Units may even be priced below current market values.

Beach’. Pre-sale prices for the single-family homes in these areas currently range from $530K to $1.5 Million. Retail sales offices and various show homes gained significant attention. Onsite sales representatives

CONDOS SAW AN IMPRESSIVE 16.4% INCREASE YEAR OVER YEAR. offered pre-packaged home designs, and

HIGHEST SALE Q3/Q4: $2,800,000 Data Source: OMREB. Photo and sale by Dave Domeij, Royal LePage Kelowna.

GLENMORE SINGLE FAMILY HOME PRICES

there was noticeably high demand for the home packages on offer.

900K

The new ‘Forest Hills’ phase in McKinley Beach now has pre-packaged single-family homes that start in the $500K’s. This area

600K

currently has the lowest pre-sale price for single-family homes in the Central Okanagan. Townhome construction remained strong this past year. Major projects like ‘Drysdale Row’ in

300K

North Glenmore sold all 69 units within a few weeks during the Summer before breaking ground this Fall. Pre-sale townhomes prices have jumped from the high $400K’s to the high $500K’s this

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 29

2017 S Q3/Q4

OKANAGAN VANTAGE REPORT

outheast Kelowna and Craw-

ford experienced heated sales

SE & Crawford

2017

2016

%Chg (yr)

Single Family

$ 1,104,203

$ 943,470

17%

Townhouse

$ 686,100

$ 710,000

-3.4%

---

$ 301.81

14.3%

competition this past year which is no surprise to those familiar with

the area. A unique mix of residential homes

and the rural feel of this community ensures there is ample interest when properties come on the market. The sale of single-fam-

Condo

ily homes increased by 8.3% year over year. The average sales price rose beyond the 900K’s we saw in 2016 hitting just North of $1 Million ($1,104,203).

$ 345.06

Price per sq/ft

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

Overall, unit sales increased by 6.9%, the sharpest rise out of all of the communities we researched. Single-family home sales rose by 17% in 2017 which is nearly double

D E D

the market-wide average. Southeast Kelowna and Crawford are a great area to invest in and put down roots – if you’re lucky enough to snap up a property.

THE AVERAGE SINGLE FAMILY HOME PRICE ROSE ABOVE $1 MILLION IN 2017

O T HO

E E N

HIGHEST SALE Q3/Q4: $5,297,000 Data Source: OMREB.

Investment in new homes remained muted since the completion of the Gallagher

SE & CRAWFORD SINGLE FAMILY HOME PRICES

Canyon Golf Course Development. However, there are a handful of estate acreage homes

900K

that are developed each year and put up for sale in Southeast Kelowna and Crawford. Unfortunately, there are not near enough of these sought-after properties to satisfy con-

600K

sumer demand, and we have not been made aware of any major upcoming developments that will be taking place in the coming year.

300K

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 30

SOUTH EAST KELOWNA & CRAWFORD

Annual Record 78

5.5

Sales

Average Inventory

Months of Supply

Days to Sell

+7%

-5%

-8%

+3%

92.6% $988,363 Average Sale Price List/Sell Ratio

+20%

-3.2%

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

-27%

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 31

2017 P Q3/Q4

OKANAGAN VANTAGE REPORT

roperty investment in Rutland

has grown steadily stronger

Rutland

2017

2016

%Chg (yr)

since 2014. The construction of new single-family homes more

Single Family

$ 543,292

$ 464,496

17%

Townhouse

$ 319,580

$ 298,501

7.1%

Condo

$ 252,529

$ 213,694

18.2%

Price per sq/ft

$ 254.47

$ 217.36

17.1%

than doubled in 2017. Year over year, there was an 18% increase in the average sales

price. The high demand for homes coupled with limited supply resulted in a 21% decline in the total number of units sold. There was impressive and somewhat expected 17% increase in the average sales price for single-family homes. Just shy of twice the

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

market-wide average. The vast majority of new home construction took place in Rutland North. The golf community of ‘Tower Ranch’ and ‘Solstice at Tower Ranch’ continue to attract consumers

over the last few years, but in 2018, a new 92-unit Highway 33 development currently marketed as ‘SoHo’ will break ground. This project will be selling pre-sale

D E D

studio apartments for as little as $159K. The entry-level price point will almost certainly attract attention from consumers and property investors alike.

looking for an active, adult lifestyle. Pre-sale homes currently range in price from the low $400K’s to the mid $800K’s. There are also newly constructed single-family homes in

O T HO

the brand new ‘Saffron’ development. This project, located at the corner of Hollywood Road South and Juniper Road, will cover a

six-acre site. The developer plans on building a total of 20 single-family detached homes and nine duplexes.

CONSTRUCTION OF SINGLE-FAMILY HOMES MORE THAN DOUBLED IN 2017.

E E N

HIGHEST SALE Q3/Q4: $3,750,000 Data Source: OMREB.

RUTLAND SINGLE FAMILY HOME PRICES 900K

Townhomes built on smaller infill sites in older areas continue to see solid pre-sales with projects typically being marketed to investors who are looking to include more

600K

family-friendly units in their rental portfolios. There was a 10% rise this past year in the number of townhomes sold and a 7% increase

300K

in the average sales price. Although sales of apartment-style condos saw a decline in 2017, the average sales price rose over 18% year over year which is more

0 2013

2014

2015

2016

2017

than two times the market-wide average. Condo development in Rutland was subdued 2017 OKANAGAN VANTAGE REPORT • 32

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017.

RUTLAND NORTH/RUTLAND SOUTH

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

List/Sell Ratio

98.1%

$418,147

-14%

+9%

+42%

+5%

-0.3%

+13%

323

135

2.7

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

141%

*Townhouse

-76%

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 33

BLACK MOUNTAIN

Annual Record 53

7.2

98% $670,866 Average Sale Price

Sales

Average Inventory

Months of Supply

Days to Sell

List/Sell Ratio

-35%

+37%

+85%

+13%

+0.4%

+8%

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

24%

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 34

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

emand cooled off during the

latter half of 2017, and the Black

Black Mountain

2017

2016

%Chg (yr)

Mountain area saw somewhat more muted property gains when

Single Family

$ 690,541

$ 646,160

6.9%

Townhouse

$ 481,980

$ 483,845

-0.4%

---

$ 250.01

$ 231.27

compared to last year. Although annual investments in new homes remained consistent year over year, this was almost entirely due to the construction of new single-family homes in the

Condo

area. There was zero apartment-style condo activity in 2017, and only nine townhomes sold.

Price per sq/ft

Pre-sale townhomes and a condo development in Black Mountain have remained at a stand-still, and currently, there are no condo developments scheduled to launch in 2018. Primarily, Black Mountain is a single-family home area and demand continues to centre on these types of properties. However, in 2017 these homes didn’t perform especially well in

8.1%

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

can look forward to pre-sales in the coming months for their Phase 9 lots. This year, Kirshner Mountain should begin to develop newly built single-family homes. Although we would usually classify this community as a mature neighbourhood, 41 lots were just released, and construction of newly built single-family homes will begin this year.

the market.

BLACK MOUNTAIN AVERAGE DAYS ON MARKET UP 16.2% The neighbourhood had below average sales price increases for the region – only 6.9% which translates into an average sales price

HIGHEST SALE Q3/Q4: $1,440,000

of $690K. There was a 13% increase in listings, but inventory saw little movement and the av-

Data Source: OMREB, Sale and Photo by Shawn Worsfold, Royal LePage Kelowna.

erage days on market increased by 16.2%. This time last year, 70 units in the Black Mountain

BLACK MOUNTAIN SINGLE FAMILY HOME PRICES

area had sold. This year, just 48 have sold – a 31.4% decrease.

900K

During the last 12 months, nearly all the single-family home construction took place in the communities of ‘Blue Sky at Black Mountain

600K

Golf Course’ and ‘Prospect at Black Mountain’. Pre-sale home prices in these developments currently range from $800K to $1.5 Million. Those looking to purchase at an even higher

300K

altitude will have the opportunity to snap up soon to be released lots near Black Mountain Golf Course.

0 2013

2014

2015

2016

2017

The popular development ‘The Highlands’ is looking to build more homes in 2018, and we

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 35

UNIVERSITY DISTRICT

Annual Record 51

2.8

Sales

Average Inventory

Months of Supply

Days to Sell

+6%

+0%

-18%

-16%

98.8% $452,048 Average Sale Price List/Sell Ratio

-1%

+0.2%

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

25%

*Townhouse

38%

**Condo

-17%

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 36

2017 OKANAGAN VANTAGE REPORT

Q3/Q4

he robust market in the Univer-

sity District was driven primarily

University

2017

2016

%Chg (yr)

Single Family

$ 736,643

$ 702,583

4.9%

Townhouse

$ 499,571

$ 486,167

2.8%

Condo

$ 363,465

$ 320,046

13.6%

Price per sq/ft

$ 244.65

$ 221.50

10.5%

by apartment-style condo units. The first half of the year saw

sales increase by 25% for condos, and by the end of 2017, sales had risen a staggering 30%. These figures sound even more impressive when compared with the 7.2% decrease in condo sales across the greater Kelowna region. The University District saw a 6.3% increase in sales which dwarfed the 10.5% decrease

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

in unit sales throughout the region (excluding lots). The area also experienced a 13.6% increase in the average sale price which was on par with other communities in our region. The average sales price for this area is now $363,465, and homes in this sought after

A townhome development called ‘Deerhurst Estates’ sold all of their units last year. The most recently priced townhomes were listed in the mid $500K’s. Although there has been very few single-family home starts in the University District over the past couple years, the community of ‘University Heights’ will be offering pre-sale homes starting in the mid $700K’s.

neighbourhood are selling for just over $370 per square foot - a 20.8% increase year over year.

CONDO SALES HAVE INCREASED A STAGGERING 30% New home construction is mainly in the form of new student rental buildings. Apartment

HIGHEST SALE Q3/Q4: $1,100,000 Data Source: OMREB.

condo developments have helped satisfy demand, but the heated market shows no signs of slowing down. There is a constant influx of new students to the UBC’s Okanagan campus. There was a 3.5% increase in enrollment

UNIVERSITY DISTRICT SINGLE FAMILY HOME PRICES 900K

for the 2016/2017 school year and consumers and investors alike are eager to snap up any available properties in the neighbourhood.

600K

Although condos currently under construction are sold out, Mission Group’s ‘U Six’ project should be released this year and con-

300K

sumers will have the opportunity to purchase micro-suites as well as 2 and 3 bedroom units. We should see the same level of enthusiasm for ‘U Six’ as we did for ‘U Five’ so

0 2013

2014

2015

2016

2017

prices will likely start from the high $230K’s. Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 37

Q3/Q4

2017 OKANAGAN VANTAGE REPORT

nvestment in new home construction remained very high in 2017 as it was

Lake Country

2017

2016

%Chg (yr)

Single Family

$ 812,665

$ 743,351

9.3%

Townhouse

$ 444,617

$ 371,980

19.5%

Condo

$ 299,069

$ 251,719

18.8%

Price per sq/ft

$ 321.34

$ 276.75

16.1%

in 2016. This year we will see many more options for consumers looking

to purchase in this idyllic area. The ‘Lakestone’ development that released 91 lots for pre-sale in 2017 (Benchlands phase) plans to pre-sell up to 109 lots (the ‘Highlands’) this year. Homes in Lakestone are currently pre-selling starting from the low $900K’s. Properties in Lake Country are always highly sought after. Consumers will have oppor-

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

tunities to purchase newly built single-family homes below $900K this year when the

The average sales price across all property types is now $444,617 in Lake Country.

much anticipated ‘The Lakes’ project begins

Townhomes also experienced a solid increase in the number of units sold - there

their final pre-sales. We would not be

was a 37.8% increase (51 sales in 2017 versus 37 in 2016). Condos fared worse as

surprised to see this community completely

sales declined by 35%. The average sales price of condos increased by 18.8% this

sell out in a relatively short period.

year which brought the average selling price of these units to just shy of $300K.

TOWNHOMES HAVE SEEN A 19.5% INCREASE IN SALE PRICE. The ‘Lakestone’ community will also be making pre-sales available for 26 townho-

HIGHEST SALE Q3/Q4: $6,400,000

mes. These units will be priced from the mid $700K’s. Townhomes are also available at

Data Source: OMREB, Sale and Photo by Steven Bergg, RE/MAX Kelowna.

the ‘Rockridge at the Lakes’ project where pre-sale prices currently start from $420K.

LAKE COUNTRY SINGLE FAMILY HOME PRICES

‘Winfield Place’ is also in the pre-sale stage and 3 bedroom townhomes units start at

900K

$499K. The ‘Apex at the Lakes’ project is planning on constructing more row house units and prices for these homes are expected to start in the low $400K’s.

600K

Apartment-style condo development in Lake Country was somewhat muted over the past couple years, and there doesn’t

300K

appear to be any plans to introduce new projects this year. Townhome and apartment-style condos saw impressive increases in the average sales price which rose 19.5% over the past year. 2017 OKANAGAN VANTAGE REPORT • 38

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017.

LAKE COUNTRY

Annual Record 218

240

5.3

97.1% $588,647 Average Sale Price

Sales

Average Inventory

Months of Supply

Days to Sell

List/Sell Ratio

-7%

+17%

-4%

-8%

+0.1%

+9%

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

116

147

-21%

*Townhouse

-45%

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 39

LAKEVIEW HEIGHTS

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

95.3%

$826,325

-1%

+3%

+5%

-7%

-0.3%

+24%

124

126

5.9

List/Sell Ratio

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

-18%

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 40

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

ome construction investment in 2017 sustained the gains

2017

2016

Single Family

$ 1,030,619

$ 834,707

23.5%

Townhouse

$ 583,726

$ 528,544

10.4%

Condo

$ 536,733

$ 323,750

65.8%

Price per sq/ft

$ 335.49

$ 292.06

14.9%

Lakeview Heights

%Chg (yr)

we saw in 2016. Nearly all new homes developed in Lakeview

Heights last year were single-family dwellings. And most of the properties built were in the developing communities of ‘Riesling Ridge’ and ‘Vineyard Estates’. Pre-sale homes in this centrally located area currently range from $640K to 1.5 Million. Later this year, ‘Riesling Ridge’ will be releasing its third phase and there will be an opportunity to build in these communities from the low $600K’s. Lakeview Heights also saw the steepest increase in average sale price out of the areas we examined - a very impressive

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

Single-family homes are by far the largest market in Lakeview Heights. Demand for these properties drives the price increases in condo and townhomes. There were 88 single-family homes sold in this neighbourhood since July. There was also a 23.5% increase in the average sales price year over year. The average home in Lakeview Heights will now set you back $1 Million.

23.7% rise year over year. Condo sales were too few to give reliable data but, prices are definitely up. This is not surprising given the seller’s market currently being experienced here. There have been only 11 listings

SINGLE FAMILY HOMES HAD A 23.5% GAIN IN AVERAGE SALE PRICE come on the market since July and just 6

HIGHEST SALE Q3/Q4: $7,000,000 Data Source: OMREB.

LAKEVIEW HEIGHTS SINGLE FAMILY HOME PRICES

total sales. Consumers looking to purchase a condo in this market need to be ready to

900K

make decisions quickly. It’s hard to imagine there ever being enough inventory on the market to satisfy the number of people who

600K

want to live in this community. There have been no townhome or condo developments in Lakeview Heights for the past couple years except for ‘Palmaro

300K

Villas’. The units at ‘Palmaro Villas’ are quite small. That said, the location can be tempting for some consumers and investors. Resale units are currently priced from $729K to $749K.

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 41

2017 N Q3/Q4

OKANAGAN VANTAGE REPORT

ew home construction invest-

ments in West Kelowna leapt

West Kelowna

2017

2016

%Chg (yr)

Single Family

$ 653,511

$ 606,963

7.7%

Townhouse

$ 517,484

$ 465,752

11.1%

Condo

$ 305,000

---

Price per sq/ft

$ 242.85

$ 222.41

9.2%

forward in 2017. The lakeside

community of ‘West Harbour’

released the third phase of their development which garnered much interest from

the public. This neighbourhood offers mixed streetscapes of single-family detached and semi-detached homes. Prices in this area range from $639K to $874K. There has been almost no development of multi-family homes in West Kelowna over

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

the last few years. There are some ambi-

Estates has remained considerably higher than it was in years prior to 2016.

tious ideas for new projects that continue

In the past 24 months, the majority of development has occurred in the community

to be discussed but nothing concrete. The

of ‘Rose Valley’. There are currently pre-sale townhomes and single-family homes

largest project being talked about is ‘Ariva

starting from $520K and $650K respectively. There is no other land currently being

Resorts’. This apartments-style, adult-liv-

developed in this community so consumers who are seriously considering this area

ing development would provide first-class

should act fast. Outside of ‘Rose Valley’, new single-family homes in West Kelowna

accommodation for many active retirees.

Estates are priced from $1 Million and up.

NEW HOME CONSTRUCTION HAS LEPT FORWARD Single-family homes experienced a 7.7% increase in prices while town homes saw an 11.1% rise in average sales price year over year. Demand is far outstripping supply in West

HIGHEST SALE Q3/Q4: $1,250,000

Kelowna, and overall housing sales were down year over year by a significant 24.3% more than double the market-wide average.

Data Source: OMREB, Sale and Photo from Quincy Vrecko, RE/MAX Kelowna.

WEST KELOWNA SINGLE FAMILY HOME PRICES

An astounding 47% drop in town home sales drove this steep decrease – from 17 sales in

900K

the latter half of 2016 to just 9 for the same period in 2017. Town homes also saw a big decline in days to sell, down 27.7% year over year.

600K

There was a decline in new listings – a 14.3% drop year over year (excluding lots). West Kelowna was also one of only three areas

300K

that saw a decrease in new property listings across all housing types. The average sales price increased by 13% year over year which is above the regional average increase of 9%. New home construction in West Kelowna 2017 OKANAGAN VANTAGE REPORT • 42

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017.

WEST KELOWNA ESTATES

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

98.2%

$609,007

-24%

-17%

+0%

-7%

+0.03%

+13%

4.2

List/Sell Ratio

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

-7%

*Townhouse

-21%

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 43

WESTBANK

Annual Record 197

112

3.7

Sales

Average Inventory

Months of Supply

Days to Sell

-12%

-0.2%

+3%

-23%

97.2% $382,057 Average Sale Price List/Sell Ratio

+22%

-0.2%

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

-25%

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 44

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

he demand for homes in Westbank remained high in 2017.

Westbank

2017

2016

%Chg (yr)

Single Family

$ 550,760

$ 435,089

26.6%

Townhouse

$ 431,143

$ 394,388

9.3%

Condo

$ 327,549

$ 267,232

22.6%

Price per sq/ft

$ 255.10

$ 211.52

20.6%

Inventory moved very quickly and days on market across all housing

types dropped by 23% in the area. Townhome sales, in particular, fell by 37.5% year over year and we saw a relatively modest 9.3% increase in the average sale price. Single-family homes in Westbank have experienced a 26.6% rise in the average sales price while apartment-style condo prices rose by 22.6% over the past 12

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

months. New home construction in the area has continued to be robust over the past

The continued investment in the city centre will lead to more multi-family projects

two years as buyers flock to an area of the

in the years to come, but this construction will unfold in due course. For now, con-

Okanagan that offers a laid-back, slower

sumers and investors alike will continue to keep tabs on what properties become

paced lifestyle, within proximity to Down-

available, and a lucky few will have the opportunity to settle in this ideal location.

town Kelowna.

WESTBANK HAS SEEN A 22.6% INCREASE IN CONDO SALES. The major development of ‘Gellatly Place’, a condo and townhome project, led the area in construction. These ideally situated

HIGHEST SALE Q3/Q4: $4,025,000

homes are adjacent to Gellatly Bay which features among other things, a 3km long

Data Source: OMREB.

boardwalk and a secure off-leash area. Easy access to beaches, green spaces and the

WESTBANK SINGLE FAMILY HOME PRICES

West Kelowna Yacht Club has attracted much interest. There are 2 and 3 bedroom

900K

homes still available, but the project is in the midst of selling their final units. Consumers who are considering investing in Westbank will continue to have difficulties

600K

finding available property. Unfortunately, ‘Gellatly Place’ is the final phase of the ‘Townhomes for Toys’ development. It’s

300K

likely that there will be no other options in Westbank for those wanting to purchase new residential units in 2018. As far as we are aware, no other projects are currently under development.

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 45

2017 T Q3/Q4

OKANAGAN VANTAGE REPORT

here were fewer home sales in

Shannon Lake this past year than

Shannon Lake

2017

2016

%Chg (yr)

Single Family

$ 674,487

$ 580,375

16.2%

Townhouse

$ 488,260

$ 381,232

28.1%

Condo

$ 347,855

$ 297,773

16.8%

Price per sq/ft

$ 250.55

$ 221.94

12.9%

there were in 2016. The average

days on market for properties went up, but

the area is experiencing steady average sales price increases across all housing types. Townhomes have seen the most substantial increase in the average sales price with a 28% rise year over year. The average price per square foot for townhomes also rose by 22.4%. Fewer townhome listings in 2017 created a tighter market which may be one

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

of the driving forces behind the significant rise in the average sales price.

Most of these projects are located in the community of ‘Tallus Ridge’, and this

Single-family homes and apartment-style

neighbourhood should continue to offer single-family lots for development

condos also experienced healthy price in-

throughout the next few years. This vibrant area is attractive to home buyers with

creases this past year. The average price for

younger families. Over half of the area being developed will be used to create

a single-family home rose by 16.2% year over

green spaces so consumers who appreciate spacious homes along with lots of

year, and condo prices rose by 16.8%. The

room to play outdoors would be well advised to consider investing here.

total inventory of single-family homes and condos available also increased during the past 12 months. There was an 18.5% rise in single-family home listings and the number of condo properties put on the market rose by 68.2%.

SINGLE-FAMILY HOMES ARE THE MOST POPULAR PRESALE PRODUCT Construction of new homes in Shannon

HIGHEST SALE Q3/Q4: $1,299,000 Data Source: OMREB.

SHANNON LAKE & SMITH CREEK SINGLE FAMILY HOME PRICES

Lake has remained strong since 2016 and single-family homes are the most popular

900K

pre-sale product. The vast majority of new development occurs in the area around the Shannon Lake Golf Course. Consumers can

600K

find many different properties on offer this year. There are beautifully presented and surprisingly spacious stack townhomes priced from the high $400K’s. Semi-detached

300K

homes and townhomes are also available starting from the low to mid-$500K’s. Single-family homes in these developments are priced from the mid-$660K’s.

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 46

SHANNON LAKE

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

98.2%

$542,820

-11%

+37%

+39%

+2%

-0.7%

+22%

144

104

3.9

List/Sell Ratio

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

-50%

*Townhouse

-23%

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 47

GLENROSA

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

99.5%

$519,143

-1%

+2%

+3%

-16%

+1.7%

+14%

3.3

Average Sale Price

List/Sell Ratio

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

340%

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 48

2017 OKANAGAN VANTAGE REPORT

Q3/Q4

here was a boom in hous-

ing starts during the past 12

Glenrosa

2017

2016

%Chg (yr)

$ 519,143

$ 457,385

13.5%

Townhouse

---

Condo

---

months in Glenrosa. The sudden increase in new home con-

Single Family

struction was due primarily to the ongoing development of ‘Crystal View’ and the introduction of the new single-family community the ‘Vines on Inverness’. The ‘Vines’ has attracted a lot of attention but it is a relatively small development - there are just 29 homes in total that will be constructed. At ‘Crystal View’ there are now only 4

Price per sq/ft

$ 239.79

13.6%

$ 211.17

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

lots that remain for sale. However, several homes that are currently under construction

the past year which is another indication of just how quick inventory was mov-

are available for purchase. Homes feature

ing. The average sale price also increased by 13.5% in 2017. The average sales

beautiful lake and valley views and the city

price for a home in Glenrosa now exceeds $500K.

centre of West Kelowna is only minutes away. The sale price for these homes start from the high $400K’s. Unfortunately, it doesn’t look as though more land will be made available for development at ‘Crystal View’ this year. Hopefully, we won’t have to wait too long before there are more opportunities to invest in this vibrant area.

THE AVERAGE SALES PRICE FOR A HOME IN GLENROSA NOW EXCEEDS $500K Glenrosa doesn’t have a condo or town-

HIGHEST SALE Q3/Q4: $1,495,000 Data Source: OMREB, Sale and Photo by Paula Stafford, Royal LePage Kelowna..

GLENROSA SINGLE FAMILY HOME PRICES 900K

home market to speak of so only single-family statistics are available for the area. Listings in Glenrosa increased in 2017

600K

by just over 30%. Such a large increase in inventory can have the effect of putting a damper on sales prices. However, sales

300K

in Glenrosa this past year were robust. Demand met the abundant supply of properties, and there were many serious buyers eager to purchase real estate in the area.

0 2013

2014

2015

2016

2017

The days on market dropped by 15.6% over Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 49

PEACHLAND

Annual Record Sales

Average Inventory

Months of Supply

Days to Sell

98.2%

$528,423

-11%

+15%

+0%

-5%

+0%

-0.6%

6.2

List/Sell Ratio

Average Sale Price

Data Source: OMREB - Real estate statistical data, Q3/Q4 2017 compared YOY to Q3/Q4 2016.

Area Highlights Non-Rental Housing Unit Starts

Dec. 2016 Nov. 2017

Dec. 2015 Nov. 2016

%Chg (yr)

Single Family

-28%

*Townhouse

**Condo

Data Source: Knew Realty Research Inc. Monthly Residential Building Permits Surveys. January - November 2017 compared YOY to January - November 2016.

2017 OKANAGAN VANTAGE REPORT â&#x20AC;¢ 50

2017

Q3/Q4

OKANAGAN VANTAGE REPORT

he major development taking

place in Peachland currently is

Peachland

2017

%Chg (yr)

2016

the construction of a senior care living facility. Outside of this proj-

Single Family

$ 624,347

$ 588,429

6.1%

Townhouse

$ 446,875

$ 436,047

2.5%

Condo

$ 437,667

$ 477,725

-8.4%

Price per sq/ft

$ 258.21

$ 223.14

15.7%

ect, new single-family home starts in 2017 remained relatively consistent with previous years. Most of the new single-family homes built during the past 12 months were in the developing community of ‘Scenic Ridge Estates’. Pre-sale homes are available from the high $600K’s. A variety of property types are available

Data Source: OMREB - Average sale price data, Q3/Q4 2016, Q3/Q4 2017.

in Peachland, but the development of

Townhome sales were down 29.4% this past year, and the increase in the average

attached-wall homes and apartment-style

sales price for these units rose by just 2.5% - well below the market-wide average

condos has been quiet over the past several

of 9%. The market for single-family homes was somewhat muted as well. We

years. This year, however, two new projects

did see the average sales price rise by 6.1% year over year, but this increase was

will be ready for pre-sales. A semi-detached

significantly less than the market-wide average.

home development is being proposed and will be located at the end of Morrison Court. There is also a mixed-use condo development called ‘Peachtree Village’ that will be built along Peachland’s famous Beach Avenue. There are just 10 homes in this development, and we expect the project to sell all units very quickly. The fact that few of these property types have been constructed in Peachland over recent years should help spur sales. Also, the opportunity to purchase waterfront property always attracts attention and deservedly so.

THERE WAS A DECREASE IN SALES ACROSS ALL HOUSING TYPES IN PEACHLAND OVER THE LAST YEAR

HIGHEST SALE Q3/Q4: $2,100,000 Data Source: OMREB.

PEACHLAND SINGLE FAMILY HOME PRICES 900K

600K

There was a decrease in sales across all housing types in Peachland over the last year. The

300K

number of condos and townhomes sold were down by 11.5% year over year. Condos are the smallest market in this area, and the turnover is so low that it’s often not useful to pay too close attention to the numbers.

0 2013

2014

2015

2016

2017

Data Source: OMREB – Avg annual sale price, single family residential. July 2013 - Dec. 2017. 2017 OKANAGAN VANTAGE REPORT • 51

WHERE WE’RE GOING

THE YEAR AHEAD By AJ Hazzi

Starter homes will be out of reach for the vast majority of first-time buyers, which has an effect on mid-range homes and certain luxury properties, although the hat does the real estate market have in store for 2018? Now that real estate has become

a hot topic again in Kelowna, this is the most frequently asked question I hear these days. Things have been good, but have they been a little too good? I will do my best to address these questions the only way they should be addressed – by analyzing the drivers and influencers that shape our local market. The media typically only reports on the Canadian housing market as a whole, which results in consumers being given

moneyed-up Gen X clientele coming in from the Lower Mainland will help absorb some of the nicer homes being downsized out of by the area’s Baby Boomers. Let’s analyze the things Kelowna has going for and against it in 2018 and what the opportunities and potential pitfalls might be. Homeowners and would-be homeowners will need to decide in 2018 whether they should buy, sell, invest or develop a property. My advice would be to consider doing “all of the above”. That said, proceed with cautious optimism. Personally, I’ll be selling off any properties that aren’t generating strong cash flow and re-investing the capital gains. New investment properties I’m considering will need to meet very strict criteria regarding cash flow. Soon I will be developing homes in the Kelowna area that meet the specific criteria baby boomers are expecting. Have a look at page 12 to see what’s at the top of the baby boomers wish list.

information that has no connection whatsoever to the area they call home. There is no such thing as a Canadian real estate market – it is town by

Completing the cycle

town and neighbourhood by neighbourhood.

After the crash in April 2008, prices in Kelowna collapses by 20% over the follow-

Kelowna, once a single-family market, is un-

ing year. We spent four full years in the slump phase of the market. In 2012, we

dergoing a big change. The market has seen

entered into the recovery phase, and supply-and-demand dynamics continued

affordability erode and its demographics shift.

to shift from buyer’s market to seller’s market. In 2016, we officially entered the

Townhomes and apartments that fit the price

boom phase. No one knows exactly how long a boom will last, but often we can

range and lifestyle of boomers and millennials

see where we are going based on where we have come from. If the slump was

will be the hot item in the year ahead. First-time

four years long and the recovery was four years, then it is reasonable to expect

buyers purchase them because they can only

that our boom phase could last just as long.

afford a maximum of around $450,000, which

Each phase of the market has a beginning, middle and end, and a set of clues that

no longer buys you a house. Empty nesters

tell us where we are. Based on what I’m seeing, I believe we are entering into the

choose them because they want to be close to

third trimester of the boom phase. This will last 12 to 18 months before the supply

amenities. There is currently only 1.15 months

and demand dynamics shift back in favour of the buyer. And what does the

of active supply in the stratified sector of the

slump look like? In my opinion, it will be a soft landing, not a sharp correction. We

market, showing just how hot condos and town-

shouldn’t have a financial collapse south of the border, we don’t have the insane

homes are these days. This is still very much a

lending that was taking place in 2007, and we aren’t witnessing the same specu-

seller’s market.

lative buying we saw 10 years ago. What we do have, regardless of interest rates

Recently, units sold at two new towers in

and which political party is in power, is some of the most desirable real estate in

downtown Kelowna were bought by ‘end users’

Canada, with a lifestyle that the two largest demographics in history, Boomers

– people actually wanting to move into the unit

and millennials, will be trying to get a piece of for years to come. A well-located

and not flip it for a quick buck. This is indicative

real estate market like the Okanagan’s will be one of the safest, most lucrative

of a healthy market, not a dangerous bubble like

investments over the next couple of decades.

we saw in the boombust era of 2007/2008. But

I believe the Kelowna market has every economic and demographic driver going

it’s not all good news. Affordability will continue

for it. Growth, however, will be tempered by political and emotional influences.

to deteriorate in 2018, driven by tightening

My prediction is that the market will hold strong through 2018, posting single-dig-

credit and prices rising to unrealistic levels. This

it growth overall, with the largest increases being seen in the townhome market.

will be the main thing hindering the single-family market in 2018.

2017 OKANAGAN VANTAGE REPORT • 52

R E A LT Y I N C .

IT TAKES

FIVE EXPERTS TO

MAXIMIZE your Kelowna real estate investments

T HE DREA M T EA M OUR FOUR PROS AND YOU. PURCHASING A PROPERTY outside your area can be daunting, not having a team of professionals you trust is what holds you back from taking advantage of the opportunity that exists right now in Kelowna. This Group of Investor focused service providers is helping regular people, take that next step in securing their financial freedom. THE DIFFERENCE between a typical real estate agent or mortgage broker that likely owns little to no real estate themselves, and a professional that not only specializes in dealing with investment property but walks the walk by building their own portfolio cannot be over stated. Savvy Investors are engaging the right Realtors, Mortgage Brokers, Property Managers and Accountants with an inside knowledge of real estate investment. In a competitive market, finding and analyzing a deal can be the most challenging part. Once you’ve found it, you need to find the right mortgage product, the right structure to mitigate tax and possibly most important, a property manager that doesn’t just protect your investment but helps you actually measure your ROI and suggest ways to improve it over time.

LI NDSAY AND ERSON Licensed Property Manager lindsay@vantagewestrealty.com Phone: 250-869-6449

GREGG ALFO NSO Law Corporation alfonso@lawcorp.com Phone 250-868-6789

D ’ARCY HE NNE BE RRY Partner/Senior Mortgage Advisor darcy@mortgagepal.ca Phone: 604-992-7323

AJ HAZZI Founder, Associate Broker Gold REIN Member & Top Player 2015 Vantage West Realty Inc. info@ajhazzi.com Phone: 250-864-6433

EACH ONE OF THESE PROFESSIONALS understands what you are trying to do, and knows what you need to succeed. With this group you can save yourself loads of time and confidently snag your piece of the Okanagan Valley.

PHONE 250-717-3133 EMAIL INFO@VANTAGEWESTREALTY.COM WEB KELOWNADREAMTEAM.COM TRADEMARKS ARE OWNED OR CONTROLLED BY THE CANADIAN REAL ESTATE ASSOCIATION (CREA) AND IDENTIFY REAL ESTATE PROFESSIONALS WHO ARE MEMBERS OF CREA (REALTOR®) AND/OR THE QUALITY OF SERVICES THEY PROVIDE (MLS®).

2017 OKANAGAN VANTAGE REPORT • 55

Vantage THE

REPORT

thereportVantage

REPORT

VANTAGE WEST REALTY INC. Suite 100-1060 MANHATTAN DR, KELOWNA, BC V1Y 9X9

PHONE 250-800-2312

EMAIL VANTAGEREPORT@VANTAGEWESTREALTY.COM

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