2021 predictions for city

As we look to 2021, I think a lot of people are excited to see 2020 in their rear-view mirror — the year that became a meme in and of itself for being wildly unpredictable and apocalyptic.  

The real estate market, however, started out strong, fell off a cliff during the first lockdown in the spring, then rallied back incredibly and finished a record year in many sectors. 2020 will be remembered by realtors fondly, I can assure you of that.

Luxury sales went through the roof as people fortified in anticipation of the next lockdown, and total sales jumped over 70% year over year. 

Now well into the fourth quarter, things are slowing as per the seasonal norm as the snow starts to fall. The question on everyone’s mind is, what does 2021 have in store for us? 

I was fairly bearish on the post-COVID market six months ago. I expected to see demand fall off once the bottleneck of buyers displaced from the spring lockdown had done their thing.

The market proved me wrong and continued to pick up steam. What hadn’t been predicted was the behavioural shift brought about by COVID-19 that would play right into the Kelowna real estate market’s hands.

Suddenly, workers became untethered from their offices, which caused many to completely rethink where they called home.

People who endured consecutive months in smaller living quarters began questioning their urban existence, and began the search for greener pastures. Buyers sought elbow room, a yard, ample space for home offices, gyms and at-home classrooms. 

Many homeowners living in the Lower Mainland made the decision to seek out a less populated area close by that offered relative affordability and the same four season lifestyle they were used to.

Kelowna became a focal point for so many seeking a change.

These behavioural shifts set in motion by a global pandemic will have a lasting impact on the buying decisions and will continue to funnel people into the Okanagan, so I see the demand remaining strong through 2021 and beyond.

This combined with record-low mortgage rates should generate enough sales activity to hold our inventory levels down in seller’s market territory in 2021.

The overall sales volume for the past two months was nearly $1 billion, this is unprecedented for our market when compared to last year at $470 million.  

This represents a lot of proceeds that find their way back into the local economy. There are dozens of ancillary businesses that benefit either directly or indirectly from this. Service providers, contractors, local retailers, you name it. 

This is good news.

Now, if you’re a buyer, you may not hear this as good news. If you have been on the sidelines for even just three months. you have watched the average single family home in Kelowna jump by nearly $40,000 and over $70,000 if you’ve been on the sidelines since before the pandemic.

Now, it's not all full steam ahead, the market will face some head winds. As single-family homes had the largest price jump, the entry-level property has been pushed out of reach for many first-time buyers.

This combined with a strict lending environment will keep many would-be homeowners on the sidelines in 2021.

The other challenge we face is a small business economy that is a little battered and bruised after lock downs and social distancing protocols put into effect. The impact on our local job market is still unknown, but this will likely play out in 2021.

This brings us to the potential foreclosure issue that may be brewing — 3.7 million borrowers in Canada are still in government and private-sector mortgage forbearance programs. That’s about seven per cent of all active mortgages, according to Black Knight, a mortgage technology and data firm.

Barring further government support, experts there predict serious delinquencies could be on the horizon.

Having said that, I doubt we will see many foreclosures, however, as people have gained so much equity that they would just sell their property prior to the buyer getting conduct of sale.

In conclusion, my prediction for 2021 is a robust year in Kelowna real estate with some excellent growth opportunities in the higher-end single-family homes, recreational property and agricultural land.

A very strong rental market with low vacancy indicates that positive cash-flow will still exist for investors and homeowners can look forward to another year with single-digit property appreciation.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.


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About the Author

AJ is the owner of Kelowna’s downtown boutique firm, Vantage West Realty. The firm takes pride in breaking the mould when it comes to how they practice real estate. With a well-deserved reputation as a real estate renegade, Hazzi has been shaking up the Kelowna real estate scene since 2002.

Having been a student of real estate through two market cycles, AJ has come to see an absence of truly qualified professionals specializing in investment real estate. This has become AJ’s role within the firm and the community: To educate clients on how to achieve financial freedom through real estate.

Arming his clients with knowledge on where to find positive cash-flow, how to renovate for profit, and other creative avenues that most agents completely ignore, Hazzi has carved out his niche as a real estate investment advisor (REIA), and loves nothing more than educating people on the right strategy to capitalize on both boom and bust years.  AJ is a firm believer that the Kelowna market is rich with opportunity, if one knows where to look.

If you are in search of an advisor who practices what they preach, consider that AJ has built his own real estate portfolio up to include multi and single family cash-flow rental properties, development property, resort property, fix and flips, and commercial properties. By sharing the lessons learned from his own experiences, his clients get the knowledge and confidence to invest without having to make the expensive mistakes he and many new investors have made along the way.

His goal is to impart on people, especially of the X and Y generation, that depending on RRSPs and Government Pension Plans to look after us down the road is risky business. Most people don't realize that as little as one or two properties added to your real estate portfolio now, can secure a comfortable, even lavish, retirement.

Bringing a consultant's approach rather than the tired, old-fashioned sales approach, AJ and his partners offer a world class service from finding, pre analyzing, and negotiating your next acquisition, to property management, all tailored to today’s busy investor.

To hear what AJ Hazzi's clients have to say about his service view the testimonials.

Contact Information

For more details or to reach AJ Hazzi, please visit www.vantagewestrealty.com

Email [email protected] Cell 250.864.6433

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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