Despite a period of slow sales, home prices in Kelowna continue to rise steadily. In the second quarter of this year, the median price of a typical single-family home in the city reached $1,147,000, marking a 3.9% increase from the previous quarter. Similarly, the median price of a typical condominium in Kelowna rose to $475,200, up by 1.5%.
The Royal LePage House Price Survey for the second quarter of 2024 revealed these numbers, attributing the price escalation to the ongoing shortage of inventory in the market. Francis Braam, the broker and owner at Royal LePage Kelowna, highlighted that despite soft sales, home prices have remained stable due to low inventory levels.
Several factors contribute to the current scenario, including high home prices, hefty down payments, elevated mortgage interest rates, excessive inflation, and a reluctance among home builders to construct new properties due to high construction costs and labor shortages. As a result, potential buyers and sellers are hesitant to make transactions, leading to fewer sales but higher prices.
Looking ahead, Braam anticipates that as more sellers list their homes, inventory will increase, potentially curbing the acceleration of prices. Royal LePage forecasts a 9% increase in home prices from the end of 2023 to the end of 2024. With prices already up by 3.9% in the second quarter, there is a possibility of further gains throughout the year.
While uncertainty persists in the real estate market, Braam suggests that a decline in interest rates could boost consumer confidence and stimulate the economy. However, significant growth in home sales may only occur once borrowing costs decrease substantially.
Comparatively, Kelowna ranks among the cities with higher home prices in Canada, with Greater Vancouver, Greater Toronto, and Greater Victoria leading the list. On the other hand, St. John and St. John’s are considered the more affordable cities in terms of home prices.