kelowna sees its third consecutive decline in annual sales Annual sales in the Central Okanagan declined for the third consecutive year in 2024, though a string of relatively stronger months to close the year has the market heading into the new year with some new momentum.
a more than decade-high in active listings also helped contribute to stronger sales activity in the second half of 2024. Contrary to sales, new listings were quite elevated last year, driven by a combination of economic factors and policy changes. There were 10,024 new listings across the region in 2024, up 11% from 2023 (9,023 new listings) and 17% above the prior 10-year average (8,577 new listings). This marked the most new listings in a single year since 2009 (10,902 new listings). In tandem with weaker sales, this put significant upward pressure on inventory levels. Active listings reached a peak of 3,078 in July, their highest level in any month going back to August 2013 (3,185 active listings). Inventory declined through the remainder of the year, in line with typical seasonal trends, to 1,957 at the end of December. This was 6% higher than at the end of 2023 and 38% above the prior 10-year December average of 1,422 active listings. Heading into the new year, recent adjustments to mortgage insurance rules should be a tailwind to already improving sales activity. As of December 15th, buyers can put lower down payments and secure cheaper insured mortgage financing on homes priced up to $1.5 million, up from $1.0 million previously. Additionally, first-time homebuyers and all buyers of newly-built homes will be able to access amortizations of up to 30 years on insured mortgages, up from 25 years previously. These new mortgage rules, alongside an expectation of further declines in borrowing costs, should support a continued market recovery into 2025.
Challenging market conditions and weak transaction activity in the Central Okanagan led to a third consecutive decline in annual sales last year. There were 3,568 total sales across the region in 2024, a 5% decline from 2023 (3,754 sales) and 29% below the prior 10-year average (5,038 sales). All told, this was the slowest year for activity since 2012 (3,279 sales), even though the population of the Central Okanagan has grown by about 70,000 residents, or 38%, since then. Looking at the year more granularly, however, shows that there was a distinct change in market activity in the latter half of the year. Sales through the first six months of 2024 were down 16% from the same period in 2023, while sales in the second half were up 10%. Most of this improvement was concentrated in the final few months of the year with sales in October up 37% year-over- year, followed by a 26% gain in November.
In December, there were 225 sales across the region, up 42% relative to the prior December. At 13% below the prior 10-year December average of 260 sales, this was the closest that sales have been to their long-run monthly average since June 2023.
A meaningful decrease in borrowing costs was largely responsible for the
aforementioned improvement in activity. Between June and December, the Bank of Canada delivered a cumulative 175 basis points worth of interest rate cuts, bringing its key policy rate to 3.25% from a more than two-decade high of 5.00%. This decline, alongside easing government bond yields, has helped put downward pressure on mortgage rates, which has improved buyer purchasing power. By our estimates, buyers using variable rate financing have seen a roughly 19% increase in purchasing power since June. More than two years of pent-up demand and
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