A Promising Outlook?
The Okanagan real estate market, like much of British Columbia, has faced its share of challenges recently. The easy to blame high mortgage rates and rising home prices have made it tougher for many to enter the market. However, according to the latest forecast from the British Columbia Real Estate Association (BCREA), there’s reason to believe that things might be set to change.
That being said not all of the forecasts they provided is rosy, the overall economic outlook BCREA is predicting to see slight Real GDP growth in 2025 despite a slight 0.2% increase in unemployment. Saving the GDP predictions to the professional economists, the part I am drawn to is the forecasted housing starts in 2025 and that in 2025 they are predicting to have 4,490 less starts than 2023.
Sales Recovery: On the Horizon?
We all know the Okanagan has seen a slowdown in home sales which in large part can be attributed in the overall affordability of homes. However, the BCREA forecast suggests that while the first half of 2024 started off slowly, sales are expected to gain momentum as the year progresses, continuing into 2025. That prediction seems to be simple and predicated on following the interest rates, the true test will come to see the confidence home buyers have in BC, especially in an election year.
By the end of 2025, they are expecting a sales growth of approximately 10.7%, bringing the market back in line with its ten-year average. This signals a gradual but steady recovery, marking the coming years as a period of renewed activity in the housing market. Which is positive news for home owners.
Price Stability and Growth: Modest Increases Ahead
The BCREA forecast does note the Okanagan appears to be hit a bit harder than some of the other areas on BC in terms in prices. With a forecasted price drop this year of -0.3% after a -5.2% drop in 2023.
But when looking at BC as a whole the forecast is predicting the average price growth for the province at 2% for 2024. The Okanagan has seen a dip in sales prices when other areas have increased.
As we have seen in our Association buyer surveys the Okanagan has seen roughly 16% fewer out of board buyers so far in 2024, than what we saw in the previous couple years. Seeing a price decline in when other regions in BC it has increased could be the price gap change that the Okanagan needed to continue to increase outside the Okanagan demand.
Expanding the vision to the mid to longer term BCREA is expecting the Okanagan to rebound in 2025 seeing price growth of 2.8% which is back in line with the forecasted average price growth for BC at 2.9%.
The province mandated Kelowna to build 8,700 extra units in the next five years there appears to be no question that the region is expected to continue experiencing growth, reflecting the ongoing demand for homes.
Balanced Market Conditions: A Stable Environment
Take it for what it is, as forecasts are about as reliable as predicting the weather, a lot can happen for the markets to change course. But for that matter we all need forecast o help plan.
BCREA is projecting that and moving forward they are predicting the real estate market to remain relatively balanced.
According to the BCREA’s forecast, the real estate market has now hit or near the bottom and they are expecting that the Okanagan real estate market is poised for a period of recovery and growth. As mortgage rates are expected to continue to decrease, and maybe some of the restrictive government housing policies disappear, the opportunity for homeownership will become more attainable and get more people off the fence.
For those contemplating a move, the best time might be coming soon, the forecast suggests that the next couple of years could present an increase in prices, due to the increase in demand. With its strong demand and stable growth, the one thing that never changes is that the Okanagan continues to be one of the most attractive places to live in British Columbia.
Have a great week!
Mark and Maddie Coons
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