Interest Rate Jitters!
In the past month we have seen moves by the Bank of Canada to soften the ever-charging Western Canadian economy. There have been many conversations I have had in the past month about the affect that will bring to bear on the real estate markets here and I would like to reinforce last years comments… very little.
Whilst the impact will be felt mostly by first time home buyers and immigrant workers moving to the region from other provinces, that is not what is fueling our housing market here.
It is noticeable to me at least that the resource market success of Alberta is now strong in Edmonton as well as Calgary. Whilst Edmontonians have always sought retirement properties in the Okanagan, more recently, many of my conversations have been with Edmontonians looking for recreational properties here. In the resort market place we typically draw a four to hour drive time around our region and look at that as our primary market for drive in traffic. Whilst some Edmontonians choose to fly, many are defying that “rule of thumb” and are driving with their families to this beautiful part of the world.
Hungry for recreational property, today’s buyer is undeterred by interest rates and more concerned for prime lakeview, lakefront or ski-hill locations. This is certainly the case with other strong market segments such as international markets. Whilst the UK investor has always had a strong affinity with Canada, heightened awareness of opportunities in Canada, coupled with a strong sterling exchange rate and a switch to a more left leaning government in the UK are all indicators of increased appetite here. Sadly, we do a pretty bad job of promoting our product to the UK and rely on the inbound visitors to drive our market. With a more sophisticated approach, the Okanagan could be taking the real estate market to the UK with great success (which we will be doing this fall) and letting them know what a beautiful region this is and what great value it represents and how accessible it is on an increasing basis.
The south Okanagan continues to attract much attention and in particular, Mount Baldy, which is currently installing it’s new lift to the summit of Sugarlump as well as servicing a new subdivision and commencing construction on two new real estate projects. This gem of an opportunity is attracting tremendous interest from investors as far away as the UK and Chiccago. Contact us for more information on what opportunities exist there and are anticipated in the future.
In general, the Okanagan still struggles with high competition for limited quality listings and the market is definitely in sellers mode and will likely continue that way into the near term future. Whilst the next forecast 0.25% interest hike may dampen the spirits of locals getting into the market or upgrading their homes, it will do nothing to soften the appetite of the out of province buyer. The local real estate board media release for June indicated an almost 60% increase in sales volume over June last year as well as a 27.11% increase in the number of units sold with only a 12.86% increase in listings (a net deficit over last year!). These are strong indicators in a market that has been hot for some time. Whilst the market could benefit from some softening, don’t expect a radical change anytime soon.
The ability to demonstrate how far your dollar will go here compared to Whistler, Canmore, Park City, Utah, Vail, Aspen and Telluride Colorado is very simple. Do some research for yourself, and you decide if you need to invest further in recreational property or liquidate some assets. It is a personal choice and the systematic risk is easily managed in today’s climate.
Enjoy the summer.
Mark Jennings-Bates is a REALTOR® with Coldwell Banker Horizon Realty in Kelowna and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.
Whilst the impact will be felt mostly by first time home buyers and immigrant workers moving to the region from other provinces, that is not what is fueling our housing market here.
It is noticeable to me at least that the resource market success of Alberta is now strong in Edmonton as well as Calgary. Whilst Edmontonians have always sought retirement properties in the Okanagan, more recently, many of my conversations have been with Edmontonians looking for recreational properties here. In the resort market place we typically draw a four to hour drive time around our region and look at that as our primary market for drive in traffic. Whilst some Edmontonians choose to fly, many are defying that “rule of thumb” and are driving with their families to this beautiful part of the world.
Hungry for recreational property, today’s buyer is undeterred by interest rates and more concerned for prime lakeview, lakefront or ski-hill locations. This is certainly the case with other strong market segments such as international markets. Whilst the UK investor has always had a strong affinity with Canada, heightened awareness of opportunities in Canada, coupled with a strong sterling exchange rate and a switch to a more left leaning government in the UK are all indicators of increased appetite here. Sadly, we do a pretty bad job of promoting our product to the UK and rely on the inbound visitors to drive our market. With a more sophisticated approach, the Okanagan could be taking the real estate market to the UK with great success (which we will be doing this fall) and letting them know what a beautiful region this is and what great value it represents and how accessible it is on an increasing basis.
The south Okanagan continues to attract much attention and in particular, Mount Baldy, which is currently installing it’s new lift to the summit of Sugarlump as well as servicing a new subdivision and commencing construction on two new real estate projects. This gem of an opportunity is attracting tremendous interest from investors as far away as the UK and Chiccago. Contact us for more information on what opportunities exist there and are anticipated in the future.
In general, the Okanagan still struggles with high competition for limited quality listings and the market is definitely in sellers mode and will likely continue that way into the near term future. Whilst the next forecast 0.25% interest hike may dampen the spirits of locals getting into the market or upgrading their homes, it will do nothing to soften the appetite of the out of province buyer. The local real estate board media release for June indicated an almost 60% increase in sales volume over June last year as well as a 27.11% increase in the number of units sold with only a 12.86% increase in listings (a net deficit over last year!). These are strong indicators in a market that has been hot for some time. Whilst the market could benefit from some softening, don’t expect a radical change anytime soon.
The ability to demonstrate how far your dollar will go here compared to Whistler, Canmore, Park City, Utah, Vail, Aspen and Telluride Colorado is very simple. Do some research for yourself, and you decide if you need to invest further in recreational property or liquidate some assets. It is a personal choice and the systematic risk is easily managed in today’s climate.
Enjoy the summer.
Mark Jennings-Bates is a REALTOR® with Coldwell Banker Horizon Realty in Kelowna and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.
posted by BCResortHomes.com at 9:29 AM
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