April 13, 2018
While Vancouver has been justifiably hogging the real estate spotlight for some time now, it seems the attention is shifting towards Kelowna. The Vancouver real estate market has over the years witnessed a sharp increase in prices driven by demand. This demand has been partly fuelled by interest from foreign buyers. Even though Vancouver is still the place to be for investors and residents alike, people are starting to turn to Kelowna BC. It is difficult to pin down the overriding factor driving this new trend but two can be touted. One, people are buying homes in Kelowna to live there due to the favourable weather, recreation, and overall better lifestyle. Second, the investors have their eyes set on the lower prices considering the potential for growth. For them, it is a good opportunity.
Prices of property in Kelowna
Kelowna has witnessed a surge in people seeking to move in and a good number of them is coming from Vancouver. The people who are seeking this move are those who are in their thirties, have a stable income, want to live comfortably with their families and want affordable housing. The Lower Mainland is finding it tougher to fulfill these desires. Subsequently, Kelowna has swooped in with decent jobs, a better standard of living, and affordable home ownership. As early as 2016, the number of people leaving the Lower Mainland headed for Kelowna BC was already increasing. By now, the rate of migration is at an all-time high.
When a 35-year-old looking for a home in Kelowna realizes that a waterfront property costs nearly the same as a two-bedroom condo in Vancouver, they find it almost imperative to move. One of the key differences between the housing market in Kelowna and that of Vancouver is how they are framed. Kelowna is consumer-driven while Vancouver is investor driven. A consumer-driven market is more stable thus less prone to price fluctuations due to speculations. When someone buys a house in Kelowna, in most cases they either want to live in it or to have it as their second home.
A research conducted by Numbeo has unearthed some significant findings as of April 2018. The price of an apartment per square feet in the City Center is $1168 in Vancouver and $360 in Kelowna. If you buy an apartment on the outskirts, you will part with $294/sqft in Kelowna and $800/sqft in Vancouver. In addition to that, the rent prices in Vancouver are higher than in Kelowna by almost 53.29%. In Kelowna, a single-family house is quite popular with the people who are selling in Vancouver and relocating to Kelowna.
The quality of the houses is also noticeably different. There are numerous condos being built in Kelowna and they are better than those in Vancouver when you consider those within the same price range. There are also private homes that people are acquiring on freehold.
In Vancouver, people who work on lower salary jobs can only afford houses which are on the outskirts of the city. They have to commute to work on a daily basis which is inconvenient. Even the people who have white-collar jobs also find themselves squeezed out of the Core by speculators from overseas. Conversely, Kelowna has its housing market driven by income and population. That explains why people who once lived in lower quality houses in Vancouver are now starting to migrate to Kelowna.
A good example is the story of Lisa Lock who works for Mission Group Homes. She is a former resident of Vancouver who lived in West Vancouver in a house worth $2.5 million. When she and her husband moved to Kelowna, they acquired a house that was twice the size of their previous one in Vancouver, and it had a pool and a hot tub. They even had some money to spare. This clearly illustrates why houses in Kelowna offers a superior value to housing in Vancouver.
Waterfront Property in Kelowna
To add on to that, Kelowna has condos built along Lake Okanagan’s shores. If you love a condo that has a spectacular view of the lake, Kelowna is the place for you. If you live in the Lower Mainland but wish to have a scenic landscape to enjoy and the luxury of taking out your boat for an afternoon cruise, why not sell your home in Vancouver and buy in Kelowna by the lake? It is a lifestyle that is within reach for the average Vancouverite home owner!
If you are after lakefront property in Kelowna, you can find something that suits your budget and preferences. There are elegant condos you can choose from. There are also homes for sale as well. Kelowna luxury waterfront homes range from $1,800,000 to $7,000,000 on Freehold. Condos range from $130,000 to $500,000.
Millenials and Generation X
As many people leave Vancouver for Kelowna for various reasons, the generation Xers and the Millennials are leading the charge. They are attracted to the lower house prices that will allow them to live better lives with their young families. Also this demographic is also more mobile a large percentage of them work online and thus have no need to live in a major city centre.
The older Vancouverites who were around when the real estate market started gaining traction are also selling and moving. For them, the investment has paid off. By relocating to a cheaper city, they can make a few dollars, and live mortgage free.
There are tell-tale signs that Kelowna is headed the same path Vancouver found itself on. For Vancouver, there is a high degree of speculative activity from foreign buyers and this has meant that the prices never fall much and the houses are usually left empty (read ghost town). This has driven people who don’t want to live there to places like Kelowna. Nevertheless, it almost feels inevitable that Kelowna will become like Vancouver as foreign speculation is making its way to Kelowna as well. In the meantime, it will be a nice place to invest and live – and to boot the foreign speculation should provide for a nice investment over the years. Eventually, it may fall into the trap of speculators if there is no intervention. In the meantime, it is a haven for people who wish to find affordable housing to live in while they enjoy their lives.
One piece of good news, although it depends where you side, and certainly not welcomed by the city, is that the province of British Columbia has included Kelowna in the .5% foreign buyer tax. This may dampen the investment growth of housing prices, but it will ensure that the city remains within reach of local residents.