For many years, certain places in the Canadian real estate market had specific designations. Some rural areas were considered excellent retirement communities, others were described as college towns, and major urban centres have been the economic and financial hubs of the nation. But the COVID-19 public health crisis caused a shift in the last two-plus years, whereby smaller markets have gained in popularity among 20-something professionals, retirees and everyone in between. An excellent example of this trend can be seen is one region of British Columbia that had long been considered a perfect place to put your feet up, sleep in until 10 a.m., and enjoy sitting on your front porch in retirement. In today’s environment, everyone is trying to get their feet into the Okanagan real estate market.
Okanagan Real Estate Market Isn’t Just for Retirees Anymore
The British Columbia real estate market has been one of Canada’s hottest for many years, but especially in the last 18 months. The interior of the province has been sizzling, too. But it is not only provincial residents who are scooping up the limited listings.
In fact, one of the largest cohorts of the region’s home-buying population has been those who live outside of the province, particularly Edmontonians, due to the standard of living enjoyed in this Western Canada province.
But why are people relocating to Okanagan, a historically retiree-driven region of both British Columbia and broader Canada? Industry experts purport that young professionals and families come to this community because they can work remotely. Instead of living in Edmonton’s concrete jungle, many are choosing the beautiful scenery and spacious homes in Okanagan.
From vineyards and ski hills to biking and hiking, there is so much to do in Okanagan.
At the same time, homebuyers are going both ways, with many British Columbians looking to buy in Edmonton, one of Canada’s most affordable housing markets. Single-family homes are selling for approximately $500,000 in Edmonton, making first-time homebuyers living in Okanagan or other B.C. housing markets take notice.
The difference, however, is that sales activity could be slowing down in Okanagan, while transactions are still enjoying modest gains in Edmonton because of subdued prices compared to the rest of the country.
“Home sales in the province continue to moderate from record highs of this time last year,” B.C. Real Estate Association chief economist Brendon Ogmundson said in a news release. “Given the sharp rise in Canadian mortgage rates and expected tightening from the Bank of Canada, activity will likely slow further in the second half of this year.”
So, how is the Okanagan real estate market performing anyway?
Supply-Demand Imbalance Impacting Everyone in Okanagan
According to the Association of Interior REALTORS® (AIR), residential property sales tumbled 25 per cent in March from the same time a year ago, totalling 1,898 units.
Although sales activity has slumped in the Central Okanagan, North Okanagan, South Okanagan and Shuswap/Revelstoke regions, the sales price for single-family homes recorded enormous gains in March. AIR data show that the benchmark price for single-family homes advanced at an annualized rate of 37.6 per cent to $731,400.
Supply was mixed as new residential listings clocked in at 2,871 units. While this was a seven-per-cent drop on a year-over-year basis, this represented a 55-per-cent increase from the previous month. Meanwhile, overall active listings slipped three per cent to 4,018 units.
The average number of days to sell a home decreased to 46 days last month, down from 54 days in February.
The association warned that these market conditions could significantly affect both buyers and sellers this year without a substantial boost in inventories.
“It is encouraging to see that in the month of March, we saw a slight increase of sales, as well as an upswing of new listings compared to February, which is seasonally expected for the local real estate market as we head into the warmer spring months,” said the Association of Interior REALTORS® President Kim Heizmann in a news release. “The spring fling seems to have been kick-started, which is great news for buyers and sellers; however, new listings are still not coming on to market at the rate needed to meet demand.”
In the end, home sales have slowed, prices are swelling, and the supply-demand equation is far from balanced, but historically low interest rates and pent-up pandemic-era savings are working in favour of homebuyers. As a result, these municipalities could continue to see impressive price growth in the coming months, be it Okanagan or Edmonton.