Despite a real estate slowdown in other parts of Canada, Okanagan developers and realtors are confident last year’s market recovery will continue in 2015 — just as sure as the thermometer rises with approaching spring.
“I think that we are going to be just fine,” says Darcy Griffiths, president of the Okanagan Mainline Real Estate Association. “Last year shows the signs of solid recovery, but sometimes we just expect a recovery to run a smooth, upward path. There are bound to be fits and sputters along the way.”
January was a soft month for sales, but Griffiths blames the heavy snowfall for that.
“As soon as it gets nice out, we will start to see more activity, more listings coming in and more sales happening.”
Like many other Okanagan watchers, Griffiths says it is likely the decline in oil prices and the impact on Alberta’s economy inevitably will impact the Valley. That situation, however, pales in comparison to larger and more persistent trends, such as the continuing retirement of baby boomers and low interest rates.
“More important than Alberta’s oil economy is the buying power of the baby boomer,” she said. “The majority of the baby boomers have retired or are near retirement and are acting on their retirement plans. Their decisions to move to the Okanagan are not based on Alberta’s current oil situation.
“In fact, we continue to get lots of people from all of the Prairie provinces, Vancouver and the rest of the Lower Mainland.”
Griffiths says the Okanagan is returning to the same level of activity as in 2007 before the financial meltdown, but prices are more stable.
“I think we will see a more gradual increase in prices rather than a spike.”
Cameron Muir, chief economist for the B.C. Real Estate Association, predicts a decline in Alberta buyers, who are likely to sit on the fence until economic conditions improve. But he characterized the decline as a “temporary, modest pullback,” especially compared to last year’s market when Okanagan property sales shot up 25 per cent.
About 17 per cent of property buyers in the first half of 2014 were from Alberta. More than nine per cent were from the Lower Mainland and Vancouver Island, according to Griffith’s association.
Sherri Paiement, executive officer of the Canadian Home Builders Association (Okanagan), agrees with Griffiths. Wesbuild’s Predator Ridge, a golf and luxury development near Vernon, and its Turtle Mountain development nearby, are both doing well, she said. Wilden, the largest single residential development between Vancouver and Calgary with a 2,500-home plan, is also doing well.
“There is a definite upswing in sales and I don’t see any signs of that slowing,” she said, predicting that as the existing housing stock decreases, demand will increase.
Despite the oil price decline, many Albertans are choosing to work in Alberta and live here, as evidenced by the growth of flights from places like Fort McMurray and Calgary.
Elsewhere in B.C., sales are expected to rise or hold steady. Unit sales on Vancouver Island, another vacation destination, are forecast to rise about 2.3 per cent, while the Sunshine Coast — where sales rose by 14.9 per cent last year — will be stable or slightly decrease by 0.9 per cent this year.
B.C. Business magazine identifies the Sunshine Coast as one of the best real estate bargains in the province, especially compared to Metro Vancouver.