Kelowna Housing Affordability
Affordability has been a word often thrown around, especially in relation to housing in the last few years. This isn't just a topic for those in Kelowna but across the province and the country. As we approach the provincial elections, affordability will likely be on the minds of many voters, as they are set to make critical decisions for the future of the Okanagan.
When it comes to housing affordability this chart from Mortgage Sandbox that they did in 2022 puts Kelowna’s situation into perspective when looking at the overall percentage of the population and potential buyers. But I will add it does not tell the entire story.
When it comes to housing affordability in Kelowna, we must consider both the local buyers and those coming from outside the area. A significant percentage of homebuyers in Kelowna, about 35%, are from outside the Okanagan. With this influx of external money, the affordability picture for local buyers becomes skewed, and Kelowna’s real estate market stands out as a unique case.
For many residents, affordability is also impacted by the fact that a considerable number of homes in Kelowna are mortgage-free. In fact, according to the 2021 census, an surprising 41.3% of homes in the city don’t carry a mortgage making it 8th in Canada. While this number may have dipped slightly in recent years due to rising living costs, it highlights the strong equity many homeowners have. This dynamic plays an important role in the overall housing landscape, as sellers of homes without a mortgage are less likely to be influenced by the rates and more focused on getting as much for there home as possible.
When it comes to home sellers, this equity provides more flexibility and negotiating power. Having this flexibility increases the chances for them to hold firm on their price, and while not every home that hasn’t sold is necessarily overpriced, some sellers may have set unrealistic expectations. This can lead to confusion among buyers about the true market value of properties. As a result, buyers may become indecisive or delay their decisions until more sales data or market information becomes available. In turn, this can cause certain areas of the market to experience a slowdown in activity
When looking at the chart below it shows the correlation for homes under $2 Million and compares average ask price vs average sale price. Despite in 2024 the average sale price coming down $75,000 since 2022 the average ask price has only come down $10,000.
As we look at Kelowna’s current home prices, it’s easy to see why affordability remains a major talking point when you see how far its come in the last 20 years. While we do see some month-to-month fluctuations in prices due to seasonal trends, and as the real estate market in Kelowna is trying to find its footing, the longer-term picture tells a different story.
As Kelowna’s real estate market continues to evolve and find its footing, staying informed is key. Whether you’re a buyer looking for clarity on market values or a seller considering your options, having the right information can make all the difference. If you're thinking about buying or selling, or simply want to understand how these trends affect your situation, we are here to help.
Feel free to reach out to discuss your specific needs or to get a personalized market evaluation and strategize depending on your goals. Let’s work together to navigate the market with confidence and ensure you’re making informed decisions.
Mark and Maddie Coons
(W)778-744-0872
(C)250-801-0361
