Let's Look At The Data
History tends to repeat itself; so before looking towards the future it is wise to look at the past. By reviewing the historical data, you would be able to have a better chance to accurately predicting what is to come next. We shall take a look at the 2013 - 2017 Okanagan Average Sales Versus Inventory data along with some other economic and political factors.
2013: Average Sale Vs Inventory
- Inventory starts from a high point in January
- Inventory drops at April / May
- Prices remain fairly constant
- Not much increase in inventory for the rest of the year
2014: Average Sale Vs Inventory
- Inventory starts from a high point in Jan / Feb
- Inventory drops at March / April
- Prices remain fairly constant
- Not much increase in inventory for the rest of the year
- Slight increase in inventory in November followed by a price correction
2015: Average Sale Vs Inventory
- Inventory starts from a high point in Jan / Feb
- Inventory drops at March / April
- Prices remain fairly constant
- Not much increase in inventory for the rest of the year
2016: Average Sale Vs Inventory
- Inventory starts from a high point in Jan / Feb
- Inventory drops at March / April
- Prices remain fairly constant
- Not much increase in inventory for the rest of the year
2017: Average Sale Vs Inventory
Notice anything different?
- Inventory starts from a high point in Jan / Feb
- Inventory drops at March / April
- Inventory suddenly sky rockets Aug / Sep
Interest Rates
- Interest rates are increased twice in 2 months
- First interest rate hikes in the last 7 years
- Mortgage rules become tighter
- Cost of borrowing goes up
Provincial & Federal Government
Both the Federal and Provincial governments are proposing changes in the tax rules which look to increase taxes. These changes will effect everyone from low income to business owners. Based on conversations with many individuals we have found that most potential buyers are waiting to see what happens with the new rules before jumping into a home purchase. Some have even decided to put their homes on the market in order to lower their risk.
So Is a Crash Coming?
I personally believe a correction is definitely coming but it is still to early to tell if a full blown crash is going to happen. The Okanagan is a very desirable location and the demand for properties in Kelowna is still fairly high. The rental incomes earned from Kelowna Real Estate are still very alluring to investors which also keeps demand coming. However even with all this demand, the supply is no increasing and at a rapid rate which should help to see the market cool down.
So what do you think? Will the market in Kelowna crash? Leave a comment down below with your thoughts!
