South Okanagan Home Prices Keep Rising
South Okanagan, the Baby Boomers Favorite Location
The South Okanagan housing market has benefited from robust consumer demand for the Okanagan region, as a whole. Vancouver Island and the Okanagan are preferred locations of adult lifestyle and retiree buyers, attracting the preponderance of BC migrants over 55 years of age.Source: British Columbia Real Estate Association, "Housing Forecast Report" - Spring 2007
With the leading edge of the baby boomers now reaching retirement age, the South Okanagan housing market will continue to be a beneficiary of this important demographic segment. A record number of MLS® sales were recorded by the South Okanagan Real Estate Board in 2005. While sales dipped 7 per cent to 2,199 units last year, it was enough to achieve the second highest ranking. Housing affordability has eroded in the region over the last five years, making it unlikely MLS® sales will reach a new record over the forecast horizon. Nevertheless, more than 2,000 units are forecast to change hands both this year and next.
Home prices are expected to continue to rise. The average MLS® price climbed 19 per cent to $272,521 in 2006. The largest gains were in single detached homes (+25%) and apartments (+23%). While a moderately higher level of apartment listings is expected over the next year, many listings will be newer, more expensive units. As a result, the average apartment price is forecast to increase more rapidly than any other home type, climbing 15 per cent to $235,000 in 2007. Multiple housing starts in the Penticton area have outpaced single detached starts by nearly four to one. Lakefront or lakeview units are leading pre-sales as high equity buyers scramble for the best units. Penticton attracts many small investors from the Lower Mainland and Alberta, and there is some indication that a few investors will sell this year to realize their profits. This will have some impact on the number of condominium listings in the resale market. Total housing starts are forecast to decline 8 per cent to 430 units this year, and an equal number of new homes are expected to begin construction in 2008.