heading into a new year on a new footing Sales in the Central Okanagan showed signs of strength for the second consecutive month, buoyed by lower mortgage rates and home prices. This trend will continue into the new year, while elevated inventory will mitigate upward pressure on prices.
was down 3.7% (to $726k), while detached homes saw a modest gain of 1.6% (to $1.01 million). Going forward, elevated inventory should cushion upward pressure on prices as a result of increasing sales. Finally, the Bank of Canada’s decision to cut its key policy rate by another 50 basis points on December 11th should inject further confidence into the housing market. Considering variable rate mortgage financing, we estimate that the Bank’s 175 basis points worth of interest rate cuts since June have increased purchasing power by about 19%. At the same time, new CMHC mortgage rules (effective December 15th) will allow buyers to put lower down payments and access lower insured mortgage rates on homes up to $1.5 million, which should further stimulate demand. With sales activity already on a different trajectory this fall and affordability conditions set to improve further, the Central Okanagan real estate market is heading into the new year on a new footing.
Sales in the Central Okanagan showed signs of strength again in November, further evidence that buyer confidence has improved in response to lower interest rates and improved affordability conditions. There were 282 MLS sales across the region last month, up 26% from November 2023 and the second consecutive month where sales were higher than the same month last year (October sales were up 37% from October 2023). This two month trend of large double-digit year-over- year sales gains is quite notable considering that, prior to October, sales had been down for eight consecutive months. What’s more, the fact that the same pattern has occurred in other major BC markets is evidence of a broader recovery in sales activity. The Vancouver Region has also seen two consecutive months of year-over-year sales increases, while the Greater Victoria market has seen monthly sales trending higher than 2023 levels since July (see this brief
article with six simple charts highlighting how sales have improved in Kelowna, Vancouver, and Victoria this fall). That said, some additional context is warranted. Though all major BC markets have seen a similar trend of rising sales this fall, the Central Okanagan has further to catch up given how slow the market has been this year. Sales in November were still 17% below their prior 10-year November average versus a 14% deficit in the Vancouver Region and a 0.3% gain in Greater Victoria. Those buyers who have stepped back into the market in recent months have benefitted from a more than decade-high in inventory, which has expanded options and put downward pressure on prices. There were 2,423 active listings at the end of November, 41% above the prior 10-year November average (of 1,720) and the highest for the month of November since 2013 (2,549). The benchmark condo price was down 4.5% year-over-year (to $477k) and the benchmark townhome price
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