Royal LePage report: Home prices up, sales down

Average home prices are up, while the number of sales are down.

That's the story from Royal LePage Kelowna, which released a report on this year's first quarter this morning (Fri).

Managing Broker Francis Braam says he thinks tensions between provincial governments are keeping Albertans away.

"I don't know that it's not just the speculation tax, but I think the fight we're having over the Kinder Morgan pipeline is also fueling them there," he said.

"When I talk to my realtors, and they talk to their folks in Alberta, they're quite annoyed at us here in BC"

As for the government's stated goal of increasing housing supply with the speculation tax, Braam says measures that might work in Vancouver just don't fit the market in Kelowna.

"Less than 2% of our buyers over the last two years have been foreign buyers," he said.

"Our experience has been that when we sell to other Canadians that don't live in BC and they buy real estate here, they either use it permanently, use it seasonally, or they rent it. They don't let it sit vacant with no use for five years."

He says Canadians who live outside the province make up 15-20% of annual property buyers, and that half of those are usually Albertans.

Braam says numbers recently cited to him by the Canada Mortgage and Housing Corporation suggested Kelowna was already making headway in increasing the rental vacancy rate.

"They said that even before the speculation tax was announced, they felt that the vacancy rate, with just what was on the books and going under construction, would increase to 2.5% by the end of this year, which would have relieved a lot of pressure on rentals."

At the end of 2017, Kelowna's rental vacancy rate was pegged at 0.2%.

The report shows the average home price in Kelowna at $632,000 for the first quarter of this year - a 9.6% increase over last year.

It also says the median condo price is up more than 13% in a year, and sits at roughly $411,000.