Kelowna is known for its natural beauty and temperate weather that has people from all over the world flocking to for not only vacations but previously the Central Okanagan was known for the amount of retirees.
Things have been changing as the economy has diversified and grown over the years, which is encouraging for people looking for a change during there working career.
With the top five employment sectors in the region being Health Care, Technology, Manufacturing, Agriculture, and Tourism. The economic strength is diverse and encouraging more young people to the region.
The increasing demand has seen home prices increase over the years. The average sale price in the Central Okanagan in July 2020 was $660,378 (including all housing Apartments and Mobile Homes). Putting it in perspective ten years ago the average sale price was $412,360. In 2016 it was $477,043 and $557,816 in 2018
Housing affordabiltiy being top of mind of the Government of BC and the Federal Government making changes to create a healthy housing market and avoid a huge fall out as was witnessed in 2008-2009 in the US. There has been government intervention that has been put in place to create more housing affordabiltiy. In 2016 the Stress Test was put in place for insured mortgages(less than 20% down) which started to change the affordability. In 2018 Government of BC introduced "Speculation Tax" in Kelowna and West Kelowna and as of July 1st of 2020 the CMHC tightened mortgage rules in response of COVID-19.
How much income is needed to be able to afford the average home in the Central Okanagan without 20% down?
In the last 5 years the income required to qualify for an insured mortgage has increased by $50,000. The increase is not all based on the regulatory changes, in 2016 the Stress Test affected home buyers by needing $16,000 additional income to qualify for the same home. The CMHC changes in 2020, buyer will need an additional $11,000 in additional income for the same home.
The speculation tax introduced in only Kelowna and West Kelowna (not Lake Country, Ellison or Peachland) is a tougher measure to see how that has created housing affordabilty.
Overall the landscape has changed in the last 5 years for lending and strong demand in the Okanagan has seen home prices increase substantially. Which is good news for a lot of people needing there homes to fund retirement, but making it tougher for people to get in the housing market.
We are seeing more than ever the amount of parents helping kids get into the market, which is a trend that is likely going to only increase.
Let me know if you have any questions or if there is anything I can do for you.
Have a great week!
-Mark