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Media Release 4Dec2018

Media Release - Cooling Trend in Okanagan Real Estate Market

MEDIA RELEASE

Government Intervention and Time of Year Slow Local Residential Market


KELOWNA, B.C. – December 4, 2018. November saw residential sales posted to the Multiple Listing Service (MLS®) drop to 459 for the Peachland to Revelstoke region, a 28% decline from the previous month and 24% fewer sales than this time last year reports the Okanagan Mainline Real Estate Board (OMREB).

“Last month, we waited to see how the market would react to the Bank of Canada’s latest interest rate hike and the BC government’s tabling of their speculation tax and while the market traditionally slows this time of year, we are also likely seeing the effects of these actions,” comments OMREB President Marv Beer.

Influencing market demand can be tricky and with two levels of government continuing to tinker independent of each other. Outcomes could quickly shift from balanced conditions that favour both buyers and sellers to a situation that could precipitate a market slide, which would benefit no one.

“While one might anticipate that a sharp shift towards a strong buyers’ market might be positive, the reality is that the BC economy is so tied to real estate values that these conditions could result in job losses, mortgage foreclosures, and the like,” contends Beer, asserting “It’s never ideal when markets take steep shifts in either direction and government can do a lot to lessen the peaks and valleys, including a focus on not just dampening demand, but also fostering development of housing that reflects the needs and wants of those wishing to buy.”

A much-needed supply of homes for sale was bolstered by a 20% increase in new listings, boosting inventory to 34% over November last year. Average price stayed consistent with the previous month and this time last year, at just 2% and 3% respectively. Average days on market, another key market indicator, rose to 91 in November as compared to 81 in October and 87 this time last year. The Shuswap/Revelstoke area bucked the trend towards more days on market recorded for the region as a whole with a 13% drop from 187 days this time last year to 163 in November.

“Even within a local real estate market, conditions can differ by region or by housing type, which is why the public is advised to consult a Realtor familiar with the area or product of interest for more in-depth market data and professional analysis and interpretation of that information,” says Beer.

Contrary to public perception, foreign and out-of-province individuals continue to be a small percentage of those purchasing homes in the region at 1-3% of the buying population. Buyers from Alberta continue to hold at about 11-12% and those from elsewhere in Canada at less than 1%. The largest buying group by far continues to be those who already live in the area at around 55-60% any given month.

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke). For detailed statistics, by zone, visit
www.omreb.com.

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Media Release 2OCT2018

Media Release - Cooling Trend in Okanagan Real Estate Market

MEDIA RELEASE

Residential Prices Inch up Despite Fewer Sales


KELOWNA, B.C. – October 2, 2018. Despite slower sales activity of 585 residential sales in September compared to 709 the previous month and 740 last year, average price across the region of Revelstoke to Peachland inched up 5% over August and 8% over last September, reports the Okanagan Mainline Real Estate Board (OMREB).

“We’re seeing a shift across the region with all signs, save average price, pointing to a market continuing to transition from a sellers’ market to one that would favour buyers and sellers more equally,” comments OMREB President Marv Beer.

“While average price, at $534,943, crept past both the previous month’s pricing and this time last year, houses are sitting on the market for longer so it’s likely only a matter of time before we start to see downward pressure on price,” says Beer. Beer was quick to note that average price can swing from month to month, depending on the mix of higher and lower-priced homes that sell in that timeframe.

Other indicators of a normalizing market include an increase in the time it takes to sell homes, with 90 average days on market for September, compared to 78 last month and 78 last year. Rising housing inventory is another signal, now 29% higher than a year ago with more supply slated to come on-stream within the next year or two.

“More supply means buyers have more choice and, as a result, tend to become more discerning. This can ultimately can affect price, however real estate markets are never quite that simple, as other factors are also at play,” says Beer.

Already checked by higher interest rates, the market may react to predictions of more hikes, now more likely with the US Federal Reserve’s most recent rate increase and the Bank of Canada’s pledge that rates will rise in October. Government policy changes, such the proposed speculation tax slated to be voted on in October can also have a dampening effect. Conversely, the market is bolstered by strong provincial economic fundamentals such as low unemployment and demographics that include millennials ready to purchase their first home.

Looking at buyers of homes in the region, the latest results from home sales closing in August reveals a strong showing of first-time buyers at 16%, although two-parent families with children topped the list at 30% of buyers. Those buying for revenue or investment purposes were 14%. Typical for the region, the largest buyer group, at 56%, comprised those who already live in the area, with the next largest groups being those from the Lower Mainland/Vancouver Island at 21% and those from Alberta at 12%. Foreign buyers were just 1%.

Beer notes that buyer profiles for the region have remained consistent over the eight years of data collection. “While the BC government would have us believe that speculation by foreign buyers and those from other provinces is making homes here less affordable, the reality is that at 84%, the vast majority of buyers in this area are BC residents, and that figure changes only slightly year over year” says Beer adding “Clearly, the solution to greater affordability lies elsewhere.

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke). For detailed statistics, by zone, visit www.omreb.com.

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Media Release 5SEP2018

Media Release - Cooling Trend in Okanagan Real Estate Market

MEDIA RELEASE

Persistent Cooling Trend For Okanagan Housing Market


KELOWNA, B.C. – September 5, 2018. A cooling trend in home sales continues across the region of Revelstoke to Peachland, with 709 sales posted to the Multiple Listing Service (MLS®) in August, a 5% drop from the previous month, yet 20% fewer sales than this time last year reports the Okanagan Mainline Real Estate Board (OMREB).

“We are now six months into a cooling trend, with a curb in demand arising from natural market shifts, but intensified by government intervention in the form of tougher mortgage rules, higher interest rates and the threat of a possible speculation tax,” says OMREB President Marv Beer.

Of note is an increase in average days on market, now at 78, up from 65 days the previous month and 69 last August. “While we are not seeing it as yet, downward pressure on price typically tends to occur when days on market lengthen,” says Beer, noting that average price in August was $511,916, an 8% drop from the previous month, but 5% higher than this time last year.

Moderating demand is helping ease a chronic shortage of housing supply, with active listings contributing to an inventory of available homes that is now 27% over this time last year. A pullback in demand coupled with an increase in the number of homes for sale is moving the region’s housing market towards balanced conditions, which typically means more selection for those in the market to buy, less likelihood of competing offers and, if it continues, downward pricing adjustments.

“Unfortunately, government intervention has also had the effect of making homes less affordable, as the new mortgage rules and higher interest rates mean that the buyer’s dollar doesn’t go as far as it used to,” comments Beer, noting that the effect is heightened in certain parts of the region where housing affordability was already challenged.

Keeping in mind the millennial generation, a group that comprises many of today’s first-home buyers, Beer suggests that housing affordability could be better resolved through measures that help deliver the type of housing that buyers want and need to market more quickly and efficiently rather than penalizing those hoping to buy.

Pointing to a provincial forecast by the British Columbia Real Estate Association that projects a 21% decline in residential sales this year, Beer suggests that further checks on demand may not be required. “Clearly, this is not the environment to introduce a so-called speculation tax that would have minimal effect on actual real estate speculators and, instead, punish long-time homeowners who are primarily BC residents,” contends Beer, noting that such a tax could have wide-spread unintended consequences. With the government vote on the speculation tax pending this fall, members of the public are urged to register concerns about the proposed tax with government at scrapthespeculationtax.ca.

OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke). For detailed statistics, by zone, visit www.omreb.com.