by Contributed - Story: 76539
Jun 15, 2012 / 5:00 am
Jun 15, 2012 / 5:00 am
Looks like CMHC and I agree on something... we are in a new economic reality.
In the BC Housing Market Outlook released yesterday, CMHC is forecasting a “hold the line” scenario with little growth forecast in either volume or prices across BC.
While they use the word “growing” a lot in their opening discussion, putting growth into context soon reveals that in fact, not much is going to change. That is in relation to province-wide forecasts.
The good news is that Kelowna is one of the best value for money markets in BC currently and is starting to fall in line with the Canadian average housing values. As a destination, I believe we still offer a lot more than other comparable BC communities for the investor/retiree or resident. For sure, Prince George beats us on housing values and even Abbotsford, but in terms of lifestyle we have them hands down.
Therein lies the secret for our future. While CMHC predicts growth rates in the 1% to 2% range for much of BC, they have some other thoughts when it comes to the Kelowna market.
As a potential retiree, you perhaps can understand why this may be the case. I have written in the past about the “Golden Years” and the fact that if you have been delaying a retirement destination decision for perhaps 5 years now, you may actually have compromised 25% or more of your golden years. I think people are starting slowly to understand that the world’s economy is broken, and is likely not going to recover the way we used to understand it. That is triggering a desire to return to the market place with a decision making mentality.
In the past I have talked about amateur real estate forecasters and their often negative viewpoints of the real estate market. Perhaps now you see the new reality is not “plunging” real estate prices or double digit interest rates. It is understanding that real estate never was a “short term investment”. It will show gains, there is no question, but as soon as out of control speculation occurs, something is wrong. That is largely the challenge in our global economy. Short term greed has left far too many sectors of our world in turmoil, whether it be government, dictators, finance institutions, investors, corporations of individuals or criminals.
So what are CMHC saying about Kelowna? The same thing I have been saying for a while now. You can expect sales volumes to pick up and quite considerably according to our national statisticians. A projected growth rate of 8.1% for volume of sales in 2012 and a further 13.9% in 2013. That is far ahead of the rest of the Province. While pricing gains are forecast to be moderate, this is the best scenario we could expect to see in todays economy I believe.
Kelowna is an amazing place and it is precisely because it has great value that we will see absorption rates pick up this year and next leading to further stabilisation and the potential for steady gains in future years.
You can download the CMHC report here.
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