Kelowna vs. National Trends: How Did We Hold Up?

This week, Central 1 Economics released a report titled “Homebuyers Rightfully Remain on the Sidelines as Economic Uncertainty Saps Confidence”, breaking down the latest Canadian Real Estate Association (CREA) data. According to the report, home sales across Canada dropped 9.8% month-over-month (m/m) and 10.4% year-over-year (y/y) in February, falling to 37,000 units sold. Any momentum that had been building in late 2024 reversed course, bringing national home sales to their lowest level since November 2023.

These are not the statistics you want to see in uncertain economic times. The sharpest declines were seen in Ontario (-20.2%) and British Columbia (-11.3%), with Toronto (-28.5%) and Vancouver (-14.3%) experiencing some of the biggest drops. This data does little to inspire buyer confidence, especially in a real estate market like Kelowna, which is largely influenced by other major markets. But the question remains—how much of this downturn is tied to broader economic uncertainty and trade wars, and how much was simply a result of the severe winter weather that kept buyers at home?

How Did Kelowna’s Market Compare?

Kelowna’s real estate market has long been influenced by outside demand, and with the city’s 4.5% population growth in 2024, that trend continues. There is a strong connection between Kelowna’s housing activity and broader Canadian real estate trends, yet despite the downturn in national sales, Kelowna saw an increase in both month-over-month and year-over-year sales.

Breaking Down Kelowna’s Market Data

While the numbers may not be groundbreaking, they highlight an important distinction—Kelowna’s real estate market operates on a different cycle than the national average. However, this could shift, so there are key trends to watch. This resilience suggests that, despite economic uncertainty, buyer activity remains steady in our region, at least for now. March sales data for Kelowna continues to show strength, reinforcing this point.

Home Prices and Buyer Confidence

Average home price is not always the best measure of how your home compares, but it does provide a strong indicator of buyer confidence in the market. In February, Kelowna’s average home prices continued to rise, even as other markets saw declines. Move-in-ready homes, particularly those that have been recently renovated, appear to be commanding higher prices. With renovation costs increasing—and likely set to rise further due to tariffs—buyers are becoming more selective, opting for homes that require little to no additional investment.

Inventory Levels: A Buyer’s Market?

Kelowna’s inventory levels are a factor that can’t be ignored. With 11 months of inventory, the data signals a strong buyer’s market. However, the reality is more complex.

You’d expect prices to drop with this level of inventory, yet we haven’t seen significant declines in average or median sale prices. A major reason? Investment and development properties are included in the active listing count. Additionally, the provincial Small-Scale Multi-Unit Housing initiative in 2024 resulted in Kelowna rezoning or changing development potential on approximately 26,000 lots. This has led to some property owners having unrealistic expectations about their home’s development potential.

Right now, certain homes are sitting on the market, while others are receiving multiple offers—clear proof that not all properties are equal. Curious where your home fits in? [Reach Out Here]

What This Means for Buyers and Sellers in Kelowna

If you’re thinking about buying or selling in Kelowna, it’s crucial to understand how these trends impact your decisions. Kelowna continues to move differently than the rest of Canada—let’s make sure you’re positioned for success.

Hope you have a great week,

Mark and Maddie Coons

(W)778-744-0872

(C) 250-801-0361

email: info@sellingkelownarealestate.com