We have known for the many years this part of British Columbia was Alberta's playground. What has changed in the last few years is that Alberta with their oil and gas riches have decided to make this their playground now and their home for that retirement in the future. The money being spent by Alberta buyers far exceeds the dollars being spent by other buyers who want to live here and make this their home. They have changed the entire marketplace. These products of the booming oil and gas business flush with cash have spent over a billion dollars in the province just last year.
Areas like the Shuswap, Radium Hot Springs, Fairmont Hot Springs and the Okanagan have known those neighbors next door to be the principal buyers some going back to the late eighties.
In the new home market Paul Fabri, the Central Mortgage and Housing analyst for this area has told us a medium price for a detached home in Kelowna has gone up 22 per cent to $345,450 last year while in Vernon the medium price is up 36 per cent to $277,000. Penticton was not included in the survey. So I went to Roger Love the G.M. at Locations West Royal Lepage in the city for his thoughts on the last five years. "I know in our most popular neighborhoods our prices over the five year period are up at least 120 per cent. The medium-house price in the market is $290,000.
It is still less expensive to live in Kamloops. Our booming communities have led the country in what can only be described as dramatic.
From a report done by the real estate firm Century 21 who surveyed thirty-eight markets. Price increases over five years for a typical home range a high of 129 per cent in Vernon. From $155,000 to $355,000 to lead the nation in price increase. A 1200-square-foot bungalow with three bedrooms, two bathrooms on a 55-foot by 100-foot lot. Also the Okanagan Kelowna saw an increase of 89 per cent, where the price of typical homes described as 2,006 square-foot split level with four bedrooms, three baths on a 65 by 120 foot lot increased from $355,000 to $650,000. Penticton was not included in the survey.
Of the thirty-eight markets surveyed, Calgary northeast was up 121 per cent, and Fort McMurray up 105 per cent. One can only say these new dramatic house price increases have not hit their peak.
In Westbank a couple of weekends ago 175 condo units were sold on the Aria Development next to the Vintage Hills Golf course in ninety minutes by the MAC real estate marketing solutions group. 1800 potential buyers had registered for the event. That sale broke the Okanagan record set last August when MAC sold 144 condos on Westbank's Baron Beach Lakefront resort in two hours.
The cost of ownership in Canada, including financing, utilities and property taxes, rose at a faster for the second consecutive quarter according to RBC's assistant chief economist, Derek Holt "Most of the deterioration in affordability was driven by a surge in home prices and rising mortgage rates."
British Columbia remained the least affordable province in which to own a home, yet despite eroding affordability B.C.'s economy continues to exhibit strength.
There is also heavy resale activity in the B.C. market and that continues to drive the market.
After the first four months of this year you can feel the strength of the market and with vibrant employment growth and migration, there certainly is no signs of a slowdown anytime soon.
Sidebar . . . . Baby Boomers have played a key role in our Okanagan real estate markets since the late 80s. Boomer demand has sparked an upswing in prices. Tear-down activity has never been like this before, as boomers construct new lakeside dwellings or in many cases renovations to the properties they are buying.. International buyers are helping fuel the demand. The Canadian dollar strength has not made a difference.
2006-05-31 (c) Christine Wolter
