some sun on kelowna’s sales The Central Okanagan saw its largest September-to-October sales increase in 25 years. While we expect 2025 to look a lot more average in Vancouver and Victoria, the current policy landscape will delay a more fulsome return to typical activity levels in Kelowna.
Where the Central Okanagan differs from these two markets, however, is that sales remained well below typical October levels. MLS sales in the Central Okanagan were 22% below their prior 10-year October average (of 405 sales), whereas sales in Vancouver were 7% below their 10-year average and Victoria was right at average. Sales activity in the region has been much more depressed than its peer markets over the past two years and thus has much further to go before returning to average. With affordability conditions continuing to improve over the next year (via additional Bank of Canada interest rate cuts and new mortgage insurance rules taking effect in December), activity levels should continue to improve across all BC markets. But while we at rennie expect 2025 to look a lot more average in Vancouver and Victoria, we do not expect activity in the Central Okanagan to fully return to more typical levels. Investors and recreational buyers have long been a major driver of real estate activity here, and the current policy environment both provincially and federally is particularly restrictive to this class of buyers (see page 28 of our fall 2024 kelowna rennie landscape,which estimates that recreational buyers have historically accounted for ~25% of sales in the Central Okanagan). Still, 2025 should be a lot brighter than 2024, which has been a particularly gloomy year for real estate in the Okanagan.
In many ways, October was a pretty eventful month. First, Statistics Canada reported inflation data that, at 1.6%, solidified the end of a more than two-year quest to bring down the highest inflation in a generation. That was followed by a larger-than-normal 50-basis- point interest rate cut by the Bank of Canada, which has dropped its key policy rate from 5.00% to 3.75% in five months. Just one day later, the federal government announced a profound pivot to its immigration policy that, if fully implemented, would lead to the first decline in Canada’s population since Confederation. All the while, our neighbours (neighbors?) to the south were in the final month of campaigning toward what would be the re-election of Donald Trump. Despite all of that, a notable increase in real estate activity in the Central Okanagan has given us plenty to write about. There were 315 MLS sales in October, a 29% month-over- month increase that was a stark contrast to
the typical 6% September-to-October decline. Looking back on 25 years of MLS data in the region, this was by far the largest September- to-October sales increase, with a 13% gain in October 2010 in a distant second-place. Relative to October 2023, sales were up by 37% to mark the first year-over-year increase since January and the largest since June 2023. The sharp rise in activity is a clear sign that buyers are beginning to come off the sidelines more meaningfully, the result of several interest rate cuts by the Bank of Canada, more than two years of pent-up demand, and plenty of purchase options with inventory at a decade-high. Both Vancouver and Victoria saw their largest September-to-October sales increases in more than two decades as well, up by 41% and 14% month-over- month, respectively. Clearly, improving macroeconomic conditions were a big driver of greater sales activity in the Central Okanagan in October.
3 Copyright ©️ 2024 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of November 12, 2024. All data from Association of Interior Realtors & rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and 2 can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E.
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