The state of the real estate market is always a hot topic. It seems like opinions change daily and it can be difficult to gain an accurate understanding of the “big picture”. Kelowna Life Real Estate Group prides itself on having a deep insight into our local market. Our finger is always on the pulse, so when the time comes for you to buy or sell, we can provide you with the solution that maximizes your dollar and more importantly, your happiness.
Growth Rates and Goldilocks
There was some concern in the past few months from some real estate investors when the Bank of Canada decided to raise interest rates at the same time as new regulatory changes were coming into effect. This could have caused stress for borrowers with uninsured mortgages and potentially cooled the market. The analysts that warned of a dip in the market said that a downturn would only last until early to mid-2018, which would then lead to a healthy rebound.
Well, it seems that we have dodged any major downturns here on the West Coast and the market has continued to grow at a healthy rate. Of course we want to see growth in the market, however, when the market grows too rapidly, there is also cause for concern. So what is the current state of affairs? We are in, what some call, a “Goldilocks Moment”. Not too hot, not cooling, just right. This is great news for buyers, sellers, and the overall health of our industry. As 2017 comes to a close in such a state, 2018 already looks promising, not only in Kelowna but all across Canada.
Now is the Best Time To Invest In Kelowna
Here in Kelowna and the rest of the Okanagan Valley, we have our own unique lifestyle and way of life. When it comes to healthy, inner provincial competition between Kelowna and Vancouver, many citizens get excited and start to brag a little. At the moment, you have one more thing to brag about as Kelowna is offering higher returns on real estate investments than Van-City and shows no signs of slowing down with a plethora of new, low-cost developments.
Colliers International is calling Kelowna, the “next great development hub”. Investors and homebuyers that are frustrated with Vancouver’s prices (and rain) are coming to sunny Kelowna to contribute to our continued real estate growth and resilience. On top of impressive growth rates and new developments, Kelowna is also a leader in the rental market for landlords. Kelowna has one of the lowest vacancy rates in Canada (lower than Vancouver’s rate for those keeping score).
What does this mean for you as a local home buyer or someone that is looking to move to Kelowna in the near future? It means that purchasing now will be an investment that should grow at a steady, healthy rate for many years to come.
Will Interest Rates Continue to Rise?
It appears that home buyers that require a mortgage will be safe in the near future with all the signs pointing towards controlled interest rates. Interest rates will increase at a rapid rate when there is a large spike in wage inflation. Wage inflation has been kept in check in almost all international markets due to globalization and the global supply of labour. Prices can only increase if consumers buying power (ie wages) increases at a similar or greater rate.
Another reason purchasing right now is a safe bet is due to the levels of household debt across the country. Canadians are carrying more debt than ever, and a large portion of that is high-interest debt, such as credit cards. If interest rates rose too quickly, a large portion of the Canadian population would be absolutely crushed by debt payments. By making smart investments (such as real estate) with debt instruments, you are saving for your future while being protected by those who are using debt in the wrong manner.
Regardless of the state of the real estate market, when you are looking to buy or sell, you want a team that is going to work harder than the competition to find you the property of your dreams while keeping your wallet in mind.