hammering toward construction highs Despite one of the slowest years for sales activity in recent memory, Kelowna has quietly been outperforming its peer markets on new housing starts. Through nine months, the region has already blown past its previous record from 2017.
housing starts in these two markets are up by a more modest 8% and 21%, respectively. Elevated financing and construction costs (and a suite of additional hurdles) have not only challenged construction activity in Vancouver and Victoria, but across Canada more broadly. Kelowna’s ability to so far circumvent these challenges is promising news for future housing supply in the region. Whether this is enough to absorb future demand as affordability conditions continue to improve (most big banks are projecting between 125 and 200 basis points in interest rate cuts from the Bank of Canada by mid-next year) or future population growth (Kelowna has been the fastest-growing CMA in Canada over the past decade) remains to be seen, but it is a promising development for a market that has been short on positive news in 2024.
In a year rife with challenges for housing market activity and affordability, the Central Okanagan has distinguished itself as perhaps the most challenged among major BC markets. MLS sales continued to fall in September and, at 243, marked a 20% drop from August and a 44% deficit when compared to the prior 10-year September average (of 431 sales). Though depressed sales have been a consistent trend this year across BC’s biggest markets, year-to-date activity in the Central Okanagan has been the most subdued. At 2,745 sales from January through September, this was 32% below the prior 10-year average (of 4,033 sales) versus 23% in Vancouver and 18% in Victoria. Where the Central Okanagan has been punching well above its weight, however, is on new housing construction. Behind all of the negative headlines and sentiment on
the region’s housing market, builders and developers have quietly been hammering away toward a record year for housing starts. Data from CMHC through the first nine months of the year shows that there have been 3,667 starts in the Kelowna census metropolitan area (CMA), up 72% from the same period last year (2,131 starts) and more than double the prior 10-year average (of 1,801 starts). Most notably, however, this already marks a new annual record for housing starts in the region, surpassing the previous annual high of 3,577 starts from 2017. In contrast, housing starts in both the Vancouver and Victoria CMAs have been on the decline this year (albeit from record levels in 2023), down 19% and 3% through the first nine months of the year, respectively. Relative to their prior 10-year averages,
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