Okanagan Real Estate Market Year in Review
The Okanagan real estate market has experienced extreme growing pains this year.
According to the Association of Interior Realtors (AIR), the market at the start of 2022 was quite under pressure due to an influx of people moving into the southern interior of British Columbia.
« Wow, well, the market is very different than it was this time last year, » said Lyndi Cruickshank, president of the Association of Interior Realtors.
“As we moved forward into January and spring, we just saw an incredible number of people making big life choices and moving from where they were to where they wanted to be, which in many cases was the ‘Okanagan.’
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However, active listings for Okanagan homes were at an all time low and supply could not keep up with demand.
In February 2022, AIR said inventory levels in the South Okanagan were down about 57% from the same time last year, which was already significantly lower than previous years.
Although active listings hit an all-time low, prices did not follow.
« Unfortunately for a lot of people, it put them in a position where they were really struggling to find a home because we had such a tight inventory, » Cruickshank said.
“People were concerned about putting their homes on the market. It was a real double-edged sword for a long time. You may have wanted to move but you are afraid to put your house on the market because you did not know where you were [going to go].”
The market has now changed again and more closely resembles the pre-pandemic Okanagan housing market.
A major change this year, however, has been the rise in interest rates.
“As we started to go through this year and interest rates started to rise, good things started to happen. We started to see more people confident about putting their homes on the market, it started to release some of that pressure,” Cruickshank said.
« The unfortunate thing is that it made it a lot harder for some people to buy and made it difficult for some people to maintain the financial commitments they had. »
Meanwhile, the government introduced three new regulations this year, including a three-day protection period to give homebuyers time to take important steps before buying a home.
The three-day period will allow buyers to secure financing and arrange a home inspection.
“The second interesting change coming on January 1 will be a restriction on foreign buyers buying property in British Columbia,” said Neuhouzz Real Estate Group owner Sergej Sinicin.
“I think the government’s intentions are good, but is that enough to bring about change in what it is trying to achieve, which is to create more affordable properties for British Columbians? I don’t think it will bring significant change and impact.
New legislation has also been introduced to remove almost all tenancy restrictions in condominiums, except for buildings for people aged 55 and over, with home care allowed.
« I refer to this as ‘Wild Bill 44’ because they introduced it and then they passed it without substantial discussion time to iron it out, » Sinicin said.
« And there were so many unanswered questions left on the table. »
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In 2023, Sinicin and Cruickshank say it’s hard to predict what the next year will look like after unprecedented times, market-defining moments and new regulations.
“My best guess is that locally here in the South Okanagan we’re still doing well, we’re going to ride out this storm,” Sinicin said.
“We’re going to see hopefully next year, maybe the second quarter, maybe the third quarter, that the banks start to lower their interest rates. Buyers, consumers are going to start adjusting to the new normal and they’re going to be back in the market right now. »
And if you decide to buy or sell in the new year, Cruickshank recommends consulting a professional.
« I think no matter where you are, the most important thing is affordability, » Cruickshank said. « You have to make sure the decisions you make are the right decisions for you, at the right time. »
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