The benchmark price for single-family homes in Kelowna has dipped below $1 million, marking a significant 13.3% drop since April 2022. The Association of Interior Realtors (AIR) reported a 3.5% monthly decrease, bringing the benchmark to $981,800 in September 2023.
Varied Price Movements Across Property Types
While single-family homes experienced a substantial decline, townhomes saw a more modest 0.3% drop to $770,100. Similarly, apartment/condominium benchmarks fell by 1.5% to $519,000.
Regional Impact on Kelowna Real Estate
The North Okanagan witnessed a fourth consecutive monthly decrease in single-family benchmark prices, settling at $731,800 in September, down 1% from August. In the South Okanagan, detached house prices declined by 18% from the April 2022 peak, with the current average at $710,664.
Factors Influencing the Market
AIR President Lyndi Cruickshank attributed the decline to the recent interest rate tightening by the Bank of Canada. Despite strong demand, prospective buyers are hesitating due to limited mortgage rate relief. The region saw a 37% drop in residential sales compared to September 2021.
Inventory Levels and Market Dynamics
While inventory levels have increased, they remain below pre-pandemic levels, hindering a shift to a balanced market. Pent-up demand continues to outpace supply, but the growing inventory provides buyers with more options than in early 2022.
Conclusion: Navigating Challenges in Central Okanagan Real Estate
The Central Okanagan real estate market faces challenges as single-family home prices dip below $1 million. The influence of interest rate tightening and the ongoing demand-supply imbalance underscores the complex dynamics shaping the region’s property landscape. Prospective buyers now find themselves in a market with more choices, albeit against a backdrop of fluctuating benchmarks and evolving buyer sentiments. The coming months will likely unfold with a delicate interplay of economic factors and market forces, shaping the trajectory of real estate in Central Okanagan.