Last week I attended a luncheon that had a presentation looking at the outlook of the real estate market in the Okanagan in 2023 and over the next 20 years. The presentation was by Andrew Ramlo, Vice President and Advisory with Rennie, and was titled “ Everything is Going to be Alright”.
I am still processing a lot of the information but here are my top 6 take aways and a link to all the slides can be found below. Overall the presentation title says it all, he is predicting with their models of population growth and the economy that everything is going to be alright. The biggest challenge BC and the Okanagan have in front of them is the housing.
Despite the inflation numbers still being higher than 6% currently those figures are all based on the previous years inflation. The good news is the, the month over month inflation rate is averaged out to 0.14% per month from June 2022 to December 2022 which was down from January 2022 to June 2022 which was 1% per month. He is predicting interest rate decreases by the end of the year based on his models and these figures.
Currently it is holding its own and job growth in December 2022 was an astounding 104,000 new jobs created, Canadian employment has grown 117% since March/April 2020, which is a trend that cannot continue, he and his colleagues are predicting.
Canada is now expected to take in 465,000 immigrants in 2023 and scaling up to 500,000 in 2025. BC’s share of the immigrants is about 15% which this equates to 75,000 people every year immigrating to BC. The actual numbers in 2021 was 17% which in turn equals 85,000 people by 2025.
The trend that started a couple years ago with people heading West, seems to be continuing interprovincial growth. In 2021, BC took on 33,000 additional people. When you then factor that in with the 57,000 of Net Immigration that BC took on, it equals a total of 90,000 additional people in BC.
5. Future Growth
In the next 20 years, he is predicting based on his models, 90,000 more people living in the Central Okanagan or a growth of 4,500 people per year. He is predicting that we are 30% shy on the amount of housing completions and new supply in the short term.
6.Equity in homes
In the Kelowna CMA, 41% of the homes are mortgage free based on the 2021 Census. This is equating to $20.7B of homes that are mortgage free, which is up 67% from 2016. Total homes owned are 61,135 with 25,275 of them are mortgage free. That is a lot of equity in the market, based on the Association of Interior Realtors numbers from 2022, 37% of the purchases were cash.
If you ever get to see him speak I highly recommend attending. If you are like me and occasionally like to “nerd out” click here for the slides from the presentation. The presentation was well put together and looks at where we are at currently and then goes into making predictions regarding the population growth and housing needs in the future.
Coming Next Week- Love it or List it? Looking at the return on investment of certain renovations.
What’s happening in our community?
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