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Okanagan Mainline Real Estate Board

OKANAGAN MAINLINE REAL ESTATE BOARD

MLS® residential sales within the Okanagan Mainline Real Estate Board are forecast to rise 7.4 per cent to 5,190 units in 2012, following two consecutive years of declining sales activity. A recovery in consumer demand this year is being aided by improved affordability due to more attractive home prices and as well as historically low interest rates. Moreover, consumer demand is being given a boost by stronger employment growth in BC as well as Alberta, a key driver of the recreational market in the Okanagan. As the economy continues to improve in 2013, we anticipate that sales activity will continue to pick-up. However, interest rates are likely to begin rising towards the end of 2012 and into next year which will operate to limit overall demand. We are forecasting MLS® residential sales to rise another 4 per cent to 5,400 in 2013.

The average MLS® average price finished 2011 nearly 4 per cent lower as elevated inventories of existing homes for sale was more than enough for market demand. However, market conditions in the Okanagan Mainline board area are on a gradual path towards balanced conditions which will likely keep prices relatively flat in 2012, albeit up less than 1 per cent to $382,800. We are forecasting a further 1.1 per cent increase in 2013 to an average price of $387,000.

The Kelowna new home market continues to be constrained by elevated inventories in both the single-family and multi-family segments as well as flagging consumer demand for recreational properties. Moreover, developers are hesitant to break ground given difficult market conditions. Given rising single-family inventories, we anticipate single-family home construction will remain well below pre-recession levels, averaging around 550 to 625 units over the next two years. In the multi-family sector, where inventories have steadily fallen over the past year, we expect a slight increase of starts to 450 units in 2012 before rising 600 units in 2013.

For full article please visit BCREA Housing Forecast – and scroll down to the Okanagan Mainline Real Estate Board June 2012 Forecast.