Kelowna is in the midst of its largest building boom. Real estate prices have been going up since 2001 and very rapidly in the last 6 months or so. The rise in prices seems to be fueled by low interest rates which is also true throughout North America. Real estate in Kelowna is getting a boost from retirees who want to move here as well as the so called "baby boomers" who are seeking recreational properties. People from other parts of Canada are re-financing their homes and buying rental properties here as well. US citizens are offered a double return because of the lower Canadian dollar. Kelowna has also reached a critical mass population wise, and the momentum for growth accounts for a lot of the buying pressure right now as well. The bridge notwithstanding, Kelowna has developed its infrastructure to the point where it can accommodate the growth and at this point we can expect several more years of steady price increases in our real estate market simply because demand exceeds supply.
Information for Buyers
People who want to take advantage of the rise in real estate prices will have several options. First time home buyers will want to act quickly before the prices go beyond the point of affordability for them. Central Mortgage & Housing will now guarantee a loan of 100% of the purchase price if the buyer has a good job and is able to support the payments. If a single family home is out of reach, then perhaps consider a townhouse or apartment to establish some equity in this market. Move quickly, however, because prices will only increase for the foreseeable future.
Information for Sellers - trading up or down
Now is a good time for people to trade up from an older home or one that they have outgrown. There is a good supply of lots to build on and this could be an option for many. The fact that the market is strong will give them top dollar for their existing homes and a larger mortgage will be affordable at the current low interest rates. Trading down or "downsizing" is also a good option for people wanting to reduce their living space requirements. In the current environment there is a strong demand for their home and smaller homes, apartments or townhouses are offered for a change of lifestyle. In the past the market has been a lot slower and often people would have to wait a long time to achieve their goals of selling their homes. Today things can be done quickly with a minimum of fuss. This helps reduce the stress involved in moving.
Information for Investors
Finally, if you have always been thinking of investing in other properties and you do not mind being a landlord, there are still a lot of attractive homes that could be purchased. Lots of my clients are re-financing their homes to do just that. They find that a higher mortgage on the home does not really increase the monthly payments that much from when the interest rates were higher. If structured correctly, the extra interest can be written off the rental income from the investment. Now they are in a position to profit doubly on the future growth of our lovely city.
