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Kelowna Housing Forecast... still strong but slowing
Housing forecast still strong, but slowing
By Steve MacNaull , Daily Courier
2008-05-21
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As expected, the housing forecast for this year and next is still strong, but shows signs of slowing.
“Consumers have pulled back in
response to rising house prices and prospects of slower economic and employment growth,” said Canada Mortgage and Housing Corporation analyst Paul Fabri in his 2008-09 Housing Market Outlook.
“With the Canadian and U.S. dollars hovering near par and U.S. house prices trending down, B.C. resorts will face competition from U.S. resort markets.”
That means Alberta and Vancouver buyers, the prime source of second home and investment home purchases in Kelowna, may instead end up buying bargains in Washington state or Arizona.
“The demand outlook, though less robust than last year, remains positive,” said Fabri.
The two most watched figures in the annual forecast are the number of construction starts on new homes along with average price and the number of existing home sales with average price.
For 2008, construction is expected to start on 2,750 homes, down two per cent from the record 2,805 in 2007.
The average price of a new single family home will be $690,000, a
9.6 per cent increase from 2007‘s $629,741.
The 9.6 per cent jump is healthy, but a slowdown from the double digit increases of the past few years.
This year, 4,730 existing homes are expected to change hands, a 15 per cent drop from 2007‘s 5,584.
The average price this year will end up to be $560,000, a 10 per cent jump from 2007‘s $507,780.
Again, the increase is respectable, but off the
20 and 25 per cent annual hikes of past years.
Kelowna has seen record activity and price increases over the past five years as the city has exploded with the attention of wealthy baby boomers buying retirement and vacation homes.
That attention will continue, but at a more moderate rate as the market adjusts to higher prices, economic worries and competition.
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