The real estate boom across the Okanagan has not felt a negative impact from the coronavirus impact on our national economy. (Contributed)

The real estate boom across the Okanagan has not felt a negative impact from the coronavirus impact on our national economy. (Contributed)

Okanagan real estate boom keeps escalating

Predictions of the current boom extending through the 2020 decade

The 2021 year is one the Kelowna real estate industry hopes will never end.

In dramatic and unexpected fashion, the Okanagan real estate boom has taken a wild upswing dating back to early last fall, despite the impact of COVID-19, a boom cycle some experts say could extend for the rest of the decade.

While those selling land and housing are cashing in, affordability has reached a crisis point.

“I think when we look back at 2021 in the real estate industry, we are going to say it was a good time, but maybe the party ended too fast,” said Scott Brown, CEO of Epic Real Estate Solutions/Fifth Avenue.

Brown was one of three guest speakers for the monthly luncheon Zoom forum hosted by the Okanagan branch of the Urban Development Institute.

Joining Brown were Marshall McAnerney, principal/co-founder of HM Commercial Group, and Courtney Deshayes, a licensed property manager with Associated Property Management.

Speaking to the residential sales market, Brown said condos, single-family detached, townhomes and high-rise housing categories have all seen sales escalate dating back to last September.

“We have had what I would call a hot winter in housing sales and that suggests the summer will double what we saw in 2020,” said Brown, noting unsold inventory has dropped 50 per cent compared to six months ago.

Brown suggested the pent-up buying demand across the Okanagan, spotlighted particularly in Kelowna, is driven by people moving to the valley instead of people moving around within a given community.

READ MORE: Okanagan real estate market heats up in January

He says the buyer market is drawn from across Canada, people making a lifestyle choice to live in the Okanagan made more feasible by the ability to work at home, setting off an in-country migration that is expected to be further buttressed by a new wave of immigration from outside Canada settling here.

“That exodus of people from the larger urban centres like Vancouver started several years ago, and we are seeing that reflected both in the Greater Victoria and Kelowna regions where the real estate market has exploded,” he said.

“In the Kelowna region, younger people coming here to work remotely or find new jobs, the 55-plus crowd still working but again seeing the potential to work remotely because of what COVID has imposed on us, and people retiring are still coming here.

“And when you think about whether you want to deal with a highway or a ferry, it puts Kelowna in an enviable position.”

Deshayes said of 10 recent rental agreements she oversaw, only one was a Kelowna person relocating, the rest coming from Vancouver, Toronto and Alberta.

Like residential home sales, where demand exceeds supply, Deshayes says she sees those same characteristics play out in the rental market – great news for investors but bad news for renters seeing rental rates spike and availability reduced.

“In some cases, we are not even advertising rental vacancies. Either by word of mouth or through friends, vacancies are filled quickly,” she said.

She said Central Kelowna statistics reveal rental rates for condos have jumped from $1,500 to $2,450; main upstairs of a house from $1,600 to $2,300; and basement suites $1,400 to $2,000 since 2018.

“It is very tough out there for tenants right now,” she admitted. “But there is more inventory coming on the market in the months ahead, so I feel good about that. It is a hot time for the market right now.”

Addressing the commercial/industrial side of the industry, McAnerney summed it up this way: “What a difference a year makes.”

Available land has become a hot commodity, entertaining multiple offers for development across the valley, attracting the interest of Lower Mainland and Alberta developers.

Commercial space leasing has also seen a surprising resurgence despite the economic impact of COVID, trending particularly in the food and beverage areas and some personal services.

“The leasing market is still on fire despite COVID, but the office leasing category has been the slowest to rebound,” McAnerney said.

“Larger corporations have shown a hesitancy to lock into long-term leasing deals. There is greater interest in leases under 10 years due to the uncertainty around design space for physical distancing.”

Brown believes the ‘canary in the coal mine’ scenarios which might alter the current market boom include a sudden rise in the mortgage default rate or the federal government using a regulatory hammer to curb an over-heated market as was done in 2016 in response to the rising mortgage debt ratio for homeowners.

On the rental side, Deshayes said the rental crunch driving up rental rates will continue to make it more difficult for affordable rental options.

“A lot of people will be left with the option of moving out of the city and go somewhere else cheaper…the housing crunch is what worries me,” she acknowledged.

CoronavirusReal estate

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

John Pavelich’s 83rd birthday had an added surprise; members of Enderby City Council came by his residence to present him with a Lifetime Civic Merit award Saturday, May 8, 2021. (Contributed)
Enderby resident unwraps Lifetime Civic Merit award on 83rd birthday

John ‘JP’ Pavelich has been a pillar of volunteerism in Enderby since 1967

The Salmon Arm Pickleball Club would like to store its locker containing a defibrillator and a few other items at the pickleball courts in Klahani Park. (Photo contributed)
Talk of ‘new day’ follows pickleball club request for locker at Salmon Arm park

Council voices varying opinions about locker for defibrillator but agrees to get rec society’s view

Nuns of Mother Teresa’s Missionaries of Charity, carry some of her relics during a vigil of prayer in preparation for the canonization of Mother Teresa in the St. John in Latheran Basilica at the Vatican, Friday, Sept. 2, 2016. In which city did she do much of her charitable work? (AP Photo/Gregorio Borgia)
QUIZ: How much do you know about these motherhood issues?

In honour of Mother’s Day, take this 10-question quiz

The Vernon Vipers defeated the Salmon Arm Silverbacks 3-1 to secure the top spot in the BC Hockey League Vernon pod Friday, May 7, 2021. (Lisa Mazurek Photography)
VIDEO: Vipers beat Salmon Arm, clinch top spot in BCHL Vernon pod

Goaltender James Porter Jr. was a wall for the Vipers, who outscored the Silverbacks 3-1 Friday

The 2021 Salmon Arm Roots and Blues Festival will be a virtual event and is slated to take place Aug. 13 and 14.(Lachlan Labere-Salmon Arm Observer)
Virtual Salmon Arm Roots and Blues returns for 2021

Participating artists will stream live during two-night event

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

The body of Brenda Ware, 35, was found along Highway 93 in Kootenay National Park on Thursday, May 6, 2021. (RCMP handout)
RCMP ask for tips after woman’s body found in Kootenay National Park

Brenda Ware was found along Highway 93 in the park, 54 kilometres north of the town of Radium

People pass the red hearts on the COVID-19 Memorial Wall mourning those who have died, opposite the Houses of Parliament on the Embankment in London, Wednesday, April 7, 2021. On May 3, the British government announced that only one person had died of COVID-19 in the previous 24 hours. THE CANADIAN PRESS/AP-Kirsty Wigglesworth
For a view of a COVID-19 future, Canadians should look across the pond

Britain, like Canada, is one of the only countries in the world to delay second doses for several months

Edmonton Oilers’ Connor McDavid (97) celebrates his 100th point this season with Leon Draisaitl (29) against the Vancouver Canucks during second period NHL action in Edmonton on Saturday, May 8, 2021.THE CANADIAN PRESS/Jason Franson
Edmonton superstar McDavid hits 100-point mark as Oilers edge Canucks 4-3

NHL scoring leader needs just 53 games to reach century mark

City of Vernon Coun. Dalvir Nahal proposed two blocks of Main Street be closed to bolster recovery for downtown businesses amid the COVID-19 pandemic. (Caitlin Clow - Vernon Morning Star)
Vernon’s ‘support local’ Main Street closure would cost city $24K, staff say

Bylaw costs, loss of parking revenue and equipment logistics behind price tag

Five properties have been added to the Lake Country fire protection zone, after council moved to expand the local service area Tuesday, May 4, 2021. (Google Maps)
Lake Country expands fire protection zone, covering 5 exposed properties

The properties petitioned to join the local service area after being left out ‘for reasons unknown’

VSAR’s Air Rescue One unit assisted in a rescue in West Kelowna May 3, 2021. (VSAR screenshot)
VIDEO: VSAR’s Air Rescue One team assists in West Kelowna Rescue

The Vernon Search and Rescue helicopter team pulled off a successful rescue Monday

Peachland resident and cleanup volunteer Lloyd Stinson Sotas holds up a discarded TV riddled with bullet holes. (Aaron Hemens/Capital News)
PHOTOS: Peachland residents clean up community watershed

More than 70 people gave back to Mother Earth by assisting with the cleanup

Most Read