Kelowna home prices up 25% from last year, but dropping now

Any way you slice it, homes in Kelowna are expensive.

Despite the recent softening of sales and prices due to skyrocketing inflation and higher interest rates, a Century 21 report released today shows the price of homes were up 24% to 28% in the first six months of this year, compared to the same time last year.

"We recognize the concerns that some might have because of interest rates, but the first half of 2022 showed growth in nearly every regional market in the country," said Century 21 Canada chief operating officer Brain Rushton.

"The highest point of the boom may have passed, but the trend is still towards higher prices, especially in suburbs where younger and first-time home buyers are looking to escape competitive metropolitan areas now that remote work has become more common. What will be interesting is to compare the data we've received from the first half of this year with the data we gather in 2023 to see how the rising rates impact the market for the next six months."

Century 21 uses price per square foot for its trends study.

In Kelowna it shows the average price per square foot for a single-family, detached home in the city was $463 January through June, up 26% from the $368 it was during the same time last year.

For a half-duplex, the price per square foot was $402, up 26% from $320.

The price per square foot for a townhouse was $452, up 24% from $365.

And for a condominium, $526, up 28% from $411.

Most people better understand the benchmark selling price the Association of Interior Realtors uses for typical homes in each category.

In June they were: $1.112 million for a single-family home (down from the record-high of $1.132 in April); $763,800 for a townhouse (off from the peak of $829,000 in May); and $537,200 for a condo (a slip from the record of $557,000 in April).

So, as you can see, in Kelowna prices are definitely up compared to last year, but right now selling prices are on a slide.

Generally, prices peaked in January amid a boom that saw homes for sale creating bidding wars and selling quickly for more than the list price.

Fluctuations started in the spring and then prices started to drop in May and June as mortgage interest rate hikes took effect.

Mortgage interest rates are expected to keep rising, so it will be interesting to see if the current downturn is a blip or here to stay.

Demand for housing is still brisk, so there are potential buyers out there, but they may be hesitant because of inflation, interest rates and an expectation that prices may slide further.

The most expensive per square foot housing in the country is a single-family home on Vancouver's West Side at $1,421, a single-family home in Montreal's downtown or southwest at $1,357, a condo in downtown Vancouver at $1,283 and a condo in downtown Toronto at $1,217.

The cheapest per square foot in Canada can be found in Saint John, where it's $163 for a single-family home and St. John's where it's $167 for the same.

Other cities with per square foot pricing similar to Kelowna's are: London, Ontario at $466 for a single-family home, Chilliwack with $425 for a townhouse and Ottawa at $451 for a condo.

"We don't want to get ahead of ourselves, we're going to keep seeing how the market performs and whether or not it cools down after the frenzy of the past year," added Rushton.

"With inflation on the rise, folks may be less able to purchase, but even a slight dip would only take us to the level of a few years back, possibly the 2018-19 period. Ultimately, there are still buyers who have been waiting for a cool-down period so they can enter the market at the best time."