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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Vancouver prices 11x higher than average income

Vancouver’s dynamic housing market has seen red-hot sales over the past year, but according to the latest rankings released by U.S. research firm Demographia, the median cost of a home in the bustling city lies far beyond the reach of a significant fraction of the Canadian population.

With the Median Multiple weakening from 10.6 in 2014 to 10.8 last year, the study revealed that the benchmark value for Vancouver homes is almost 11 times greater than the average national pre-tax household income, with price hikes showing no signs of stopping anytime soon.

“This represents a more than doubling from the 1st Annual Demographia International Housing Affordability Survey [12 years ago],” the study noted, as quoted by BNN News.

Financial services firm UBS stated that Vancouver is one of the cities worldwide most vulnerable to a real estate bubble. In addition, Vancouver is among the five least affordable cities in Canada (four of which are in British Columbia), and the third most expensive market in the world.

Hong Kong came on top of the UBS analysis as the most costly city in the world, with average home prices running at 19 times higher than the median household income. Meanwhile, Moncton and Saint John, New Brunswick remain the most affordable markets in Canada.

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