The Okanagan real estate market is cooling off, according to the Okanagan Mainland Real Estate Board.
Residential sales across the region of Revelstoke to Peachland moderated slightly in July, with 742 sales posted to the Multiple Listing Service, down 7 per cent from June, yet 23 per cent lower than this time last year the Okanagan Mainline Real Estate Board (OMREB), said in a news release.
“I think we can officially say that we are moving towards balanced market territory, although we are still at a point where the market tends to favor sellers more than buyers, yet not as much as in previous years,” said president Marv Beer, noting five months of consistently lower sales volumes than last year, coupled with more new listings contributing to a growing inventory of available homes that is 26 per cent higher than this time last year.
Despite indicators suggesting the region’s market is transitioning, July’s average price held at $559,235, 2 per cent higher than June and 11 per cent over this time last year. Days on market, an indicator of how long it takes to sell a home, was consistent with this time last year, at 65 days versus 63.
“It takes time for those active in the market to respond to changing market conditions, so sales activity tends to fall before prices adjust. Likewise, days on market is also a factor to watch, with longer days on market associated with downward pressure on pricing,” Beer said.
While a pullback from the highs of the last few years is expected, current home buyer activity is also being dampened by government intervention. The Bank of Canada raised its interest rate July 11 for the second time this year and is expected to cautiously hike interest rates over time. More restrictive mortgage requirements are also having an impact, as is the specter of the provincial speculation tax, the release said.
The OMREB is sceptical of the province’s speculation tax.
For eight years running (the timeframe OMREB has been collecting buyer data) foreign buyers comprise less than 3 per cent of the buying group at any given time and those from other provinces are less than 15 per cent, of which Albertans are around 10 per cent, depending on the year, the release said.
The largest buyer group, at consistently 50-60 per cent, comprises folks who already live here, with those from the lower Mainland/Vancouver Island comprising the second largest buyer group at about 20 per cent.
“The make-up of buyers of homes in this region, softening market conditions and continued federal government intervention all would suggest that further interference in the market via a speculation tax that would impact long-term B.C. homeowners far more than speculators, out of province, or foreign buyers is not needed and makes no sense whatsoever,” Beer said, noting two-thirds of the homes targeted by the tax are, in fact, owned by B.C. residents, the release said.
OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke). For detailed statistics, by zone, visit www.omreb.com.