Why Appraisals Are Becoming a Bigger Problem for Kelowna Condo Buyers
The deal is not done when the offer is accepted
A buyer can love the condo.
The seller can accept the offer.
The inspection can go fine.
The financing can look good.
And then the appraisal comes in low.
That is where more Kelowna condo deals are starting to get uncomfortable.
For years, many buyers were told the biggest challenge was getting an accepted offer. In a hot market, that was true. Buyers competed, prices climbed, and lenders often had enough recent sales to support the numbers.
But today’s condo market is different.
We have more new-build supply. We have presale contracts that were written years ago at peak pricing. We have buyers comparing brand-new units against resale condos that may be selling for less. And we have lenders looking much harder at what the property is actually worth today.
That is why appraisals are becoming a bigger problem for Kelowna condo buyers.
What is an appraisal?
An appraisal is a professional opinion of value.
It is not the list price.
It is not the builder’s price.
It is not what the buyer hopes the condo is worth.
It is an appraiser’s estimate of market value based on the property, the building, the condition, the market, and comparable sales.
For a lender, the appraisal matters because the home is the security for the mortgage. If a buyer stops making payments, the lender wants to know the property could likely be sold to recover the loan.
That sounds simple.
But it gets messy when the market changes between the time a condo was sold and the time it closes.
Why condos are harder to appraise right now
Condos are not like single-family homes where every property is unique.
In a condo building, appraisers often look at recent sales in the same building, nearby buildings, similar floor plans, similar views, similar parking, similar strata fees, and similar age.
That can be useful.
But it can also create problems.
If one or two units sell low, those sales can affect the next appraisal. If a developer discounts remaining inventory, those numbers can affect resale owners. If a buyer paid presale pricing from two or three years ago, today’s resale comps may not support that contract price.
That is the issue.
The buyer may have agreed to one number.
The lender may only support another.
The presale problem
This is where presale condos can get tricky.
A buyer may have written a contract when the market was stronger. Maybe interest rates were lower. Maybe investor demand was higher. Maybe the sales centre was full. Maybe comparable new-build prices looked solid at that time.
Then the building takes two, three, or four years to finish.
By the time the buyer actually needs the mortgage, the market may be different.
The lender is not lending against what the condo was worth when the buyer signed the contract.
The lender is looking at what the condo is worth now.
That creates the appraisal gap.
A simple example
Let’s say a buyer agreed to purchase a Kelowna condo for $750,000.
At the time, the price felt fair. Similar new units were selling around that number.
But now the building is complete, and recent resale comps are closer to $710,000.
If the appraisal comes in at $710,000, the lender may base the mortgage on that lower value.
That does not mean the buyer automatically gets a $40,000 discount.
It means the deal may now have a $40,000 problem.
Someone has to solve it.
The buyer may need more cash.
The seller may need to lower the price.
The buyer’s mortgage broker may need to try another lender.
Or the deal may not come together.
Why this matters in Kelowna
Kelowna is not Vancouver.
But Kelowna is not immune either.
CMHC’s May 2026 data shows Kelowna had hundreds of completed but unabsorbed condo units. That means units are finished, but not yet absorbed by buyers. [1]
That matters because supply affects value.
When buyers have more choice, they become more careful. When resale units compete with new units, prices can get tighter. When builders, assignment sellers, and resale owners are all trying to attract the same buyer, appraisers have more data points to review.
Some of those data points may not be flattering.
That is especially true in buildings where units sold at stronger presale pricing, but today’s resale market is more cautious.
The Vancouver announcement adds another layer
The recent Canada-BC condo conversion announcement is mostly a Metro Vancouver story.
The federal and provincial governments announced a plan to convert more than 2,200 vacant condo units in priority growth areas into affordable homes using Build Canada Homes and BC Housing. [2]
That does not directly change a Kelowna buyer’s mortgage approval.
But it does matter as a signal.
It tells us governments are now stepping into completed condo inventory in a bigger way. It also raises a question: if large blocks of condos are purchased, discounted, converted, or removed from the open market, what happens to comparable sales?
That is where appraisals can get murky.
If those sales are low, they can pull values down.
If those sales are high, they can make the market look stronger than it really is.
Either way, the clean market signal gets harder to read.
The lender is not trying to ruin the deal
This is important.
A low appraisal does not mean the lender hates the building.
It does not always mean the buyer overpaid.
It does not always mean the seller is unreasonable.
It means the lender needs the value to make sense based on the appraiser’s report.
That report is usually built on comparable sales.
So if recent sales are lower, if supply is high, if days on market are longer, or if there are many similar units available, the appraisal may be more conservative.
Buyers need to understand this before removing financing conditions.
What happens if the appraisal comes in low?
A low appraisal can create a few different outcomes.
The buyer may bring in more cash to cover the gap.
The seller may agree to reduce the purchase price.
The buyer’s mortgage broker may try another lender.
The buyer may request a review of the appraisal if there is strong evidence that better comparable sales were missed.
Or the buyer may walk away, if the contract allows them to do so.
This is why financing conditions matter.
In a market where appraisals are becoming less predictable, buyers need to be careful about going unconditional too quickly.
What Kelowna condo buyers should do
Before writing an offer, buyers should ask better questions.
What are the most recent comparable sales in the building?
Are there active listings in the same building competing with this unit?
Are any developer-owned units still for sale?
Have there been recent price reductions?
Are there assignment sales?
Are strata fees higher than similar buildings?
Is the building mostly owner-occupied, investor-owned, or short-term-rental focused?
Has the buyer’s mortgage broker seen appraisal issues in this building or similar buildings?
These questions matter because lenders care about risk.
And right now, some condo buildings carry more financing risk than others.
What Kelowna condo sellers should know
Sellers need to understand that the highest offer is not always the safest offer.
A buyer may offer a great price, but if the lender does not support the value, the deal can get shaky.
This is especially important for sellers in newer buildings, buildings with lots of similar listings, or buildings where recent sales have come in lower than expected.
A strong listing strategy should include more than just a list price.
It should include recent comparable sales, active competition, building-specific risks, and a plan for what happens if the appraisal becomes an issue.
If the likely buyer needs financing, the appraisal matters.
New does not always mean worth more
This is one of the hardest things for sellers and developers to hear.
Newer does not automatically mean more valuable.
A new condo may have better finishes, better amenities, and lower maintenance needs. Those are real benefits.
But the buyer still has to compare it to everything else available.
If a resale condo offers more square footage, a better view, lower strata fees, or a stronger location at a lower price, that resale unit becomes a real comp in the buyer’s mind.
And sometimes in the appraiser’s mind too.
That is where the market starts to push back.
The real issue is confidence
Appraisals become a bigger problem when confidence gets weaker.
If buyers are confident, they stretch.
If lenders are confident, they approve.
If appraisers have strong recent sales, the values are easier to support.
But when supply rises, investors pull back, presale buyers get nervous, and resale prices soften, the whole system becomes more cautious.
That is what we are watching right now.
Not a crash.
Not panic.
But caution.
And caution changes how deals get financed.
The bottom line for Kelowna buyers
If you are buying a Kelowna condo, especially a newer condo or presale assignment, do not just ask, “Can I afford the payment?”
Ask, “Will the lender support the price?”
That is a different question.
The accepted offer is only one part of the deal.
The appraisal may be the part that decides whether the deal actually closes.
The bottom line for Kelowna sellers
If you are selling a condo in Kelowna, pricing to hope is risky.
Pricing to the lender’s reality is smarter.
That does not mean giving the property away.
It means understanding the recent sales, the active competition, the building story, and the type of buyer most likely to purchase your unit.
The better your pricing strategy, the lower the risk of a deal falling apart later.
Final thought
Kelowna’s condo market is still moving.
Good units are selling.
Well-priced units are getting attention.
But the market is more selective now.
The old presale math does not always work with today’s lender math. And when the appraisal comes in below the contract price, the gap becomes very real, very fast.
If you are buying or selling a Kelowna condo and want to understand how appraisal risk could affect your situation, call or text me at 778-946-6454.
It is better to know the risk before you write the offer, not after the lender orders the appraisal.
Mark Coons, BBA, CE
REALTOR® | eXp Realty Kelowna
Team Lead, Selling Okanagan Group
Relocated to Kelowna in 2018
📞 778-946-6454
📩 [email protected]
