After posting exceptional growth numbers last year, Kelowna will see a noticeable slowdown in its rate of new construction in 2017, the Canada Mortgage and Housing Corporation stated recently.
“The pent-up demand has been satisfied to some extent, so 2017’s forecast definitely calls for a moderation from 2016,” CMHC market analyst Taylor Pardy told The Daily Courier
“As well, population growth and migration to Kelowna from other parts of the province and the country is expected to slow a bit this year.”
The city posted an impressive 72 per cent year-over-year growth rate in its new home construction rate in 2016. Kelowna’s total number of starts across all housing types last year was 2,196, according to CMHC data.
“Population growth in the Central Okanagan was 3.2 per cent in 2016, the highest in the country,” Pardy explained. “Builders responded by building a lot more homes.”
“Kelowna has a strong economy, and that attracts young people, families and people in their prime working years,” he added. “Generally, they want single-family homes, but some young first-time buyers will start with a condo or townhouse for affordability.”
This year’s slowdown is projected to settle between 19 per cent and 31 per cent, down to between 1,520 and 1,780 starts.
Recently, markets observer Chris Walker highlighted the gains that Kelowna has experienced in a relatively short span of time, mainly driven by hopeful would-be buyers escaping overheated Vancouver.
“I moved to the Okanagan six years ago to work for the local CBC bureau, and I bought a house in the downtown core. I opened my most recent B.C. Assessment notice to find its value had increased by 16 per cent. It's the biggest jump in the past five years, which have seen a 30 per cent increase overall,” Walker recounted.
“[Okanagan is] actually growing twice as fast as the next fastest growing city in B.C., and it's growing three times as fast as Victoria and Vancouver,” Francois Sergerie of Statistics Canada said last year.
Foreign buyer’s tax played a major role in slowing down overseas entry - analyst
Parental funds playing a larger role in B.C.’s first-time buyer market - report