Kelowna to become multi-family housing hub?

In its latest study, real estate team HM Commercial Group found that Kelowna is poised to distinguish itself in the B.C. housing market through its accelerated pace of building in the residential segment.

“Demand for all forms of housing remains exceptionally strong and the City of Kelowna favours a policy towards densification in the urban town centres, which also bodes well for more affordable forms of multi-family development,” according to the Fall 2017 HM Commercial Report.

Most notably, “the Downtown Core is experiencing a boom of high density development, with projects like the 21-storey tower at 1151 Sunset Drive (now 85% pre-sold before occupancy in Spring/Summer 2018),” the report added. “New projects like One Water Street and Live at Ella are anticipated to achieve average sales of more than $600 per square foot with the upper floors expected to reach more than $900 per square foot.”

As of the third quarter of this year, the value of multi-family building permits in Kelowna totalled $95.5M, compared to the $76.9M for the whole of 2016.

The study results indicated that up to 95% of condo buyers in Kelowna will be occupying their purchases instead of using these for investment purposes—a much different situation from 10 years ago, “when up to 70% were speculative investors.”

“[This] is an excellent sign of continued strength in the market and means more people living in the urban centres and increased vibrancy,” the report stated.

The city will also benefit from an influx of wealthy elderly Canadians, HM Commercial predicted.

“As baby boomers retire, they continue to look to the Okanagan. With fewer properties available in Vancouver, Kelowna and Victoria are benefiting,” the report said, adding that the demographic shift will also be apparent in the younger generations.

“The overflow from Vancouver, combined with all of the things Kelowna has to offer, is bringing a significantly younger demographic to the City, one that is fuelling a $1.3 Billion tech sector. 262 tech companies call Kelowna home and this number is growing every day.”

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Meanwhile In Canada, A Real Estate Bargain Emerges… | Zero Hedge

We’ve long known that Canada, like Sweden and Denmark, is sitting on a giant housing bubble.

Indeed we took a close look at the issue back in March of last year and have revisited in on several occasions since. Put simply, the divergence between crude prices and the country’s housing market simply isn’t sustainable a you can see from the following chart:

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And while the boom is rapidly turning to bust in places like Calgary, things are humming right along in Waterloo, where Napoleon was defeated in 1815. No, wait – wrong Waterloo. This is Waterloo, Ontario, a town of 140,000 that’s being billed as “Canada’s Silicon Valley.”

As Bloomberg reports, “the town revolves around two universities and a burgeoning technology sector that’s attracted companies such as Google Inc. and dozens of startups.” Here’s a look inside the Kitchener-Waterloo Google office:

The buzz has created a “land grab” and now, condos are renting for nearly C$2,000 per month while one-bedroom units are selling for more than a quarter of a million dollars.

Vacancy rates are at 13-year lows and Google’s country manager for Canada calls the city “lightning in a bottle.”

If that sounds like a bubble to you, you’d be correct but some investors don’t see it that way.

Take Bill Ring for instance, head of operations for a property management company who Bloomberg notes drove two hours to Toronto to attend a rowdy sales pitch for condos in Waterloo put on by a Bay Street trader turned-tech investor, turned-real estate mogul. “Students are coming in and need a place to live, tech companies are opening. It’ll all drive the value up,” he says. “I don’t want to invest in stocks because they’re crazy and real estate is a solid, safe investment.

Yes, Bill wants a “solid, safe investment” that isn’t “crazy.”

Like Canadian real estate.

Which definitely isn’t a bubble.

After all, if the housing market in Canada were overheating, you wouldn’t be able to get “bargains” like the listing shown below from Vancouver.

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h/t @penultsquire

Good luck Bill.

4.78788

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