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Neil Chrystal of the UDI compared the Vancouver and Kelowna real estate markets.
By Kathy Michaels
Being a small town with an abundance of modern amenities should make Kelowna a shoe-in for growth coming out of the recession, but not being an immigration hub could be slowing its progress.
During an Urban Development Institute meeting yesterday, Neil Chrystal, president of the UDI Pacific Region and CEO of Polygon Homes Ltd. gave his take on the local real estate market, noting he was surprised by some of the incongruencies between this city and Vancouver.
While both hit a wall in terms of real estate sales by November of 2008, consumer demand has long since returned in Vancouver, spiking prices and sales volume above the highs of 2008.
In Kelowna, however, that’s far from the case.
“Vancouver bounded back and Kelowna got nothing,” said Chrystal, adding he’s wondered what the difference could be and landed on the lack of appeal to the Asian consumer.
“You are a resort market — a secondary home market a bit like Whistler— and that market continues to be dead.”
And it will remain dead until those who have discretionary income become interested in picking up a second home. For the time being, he said, they aren’t.
“(The Albertans) left town and they aren’t coming back for awhile,” he said.
Albertans were never really embedded in the Vancouver economy so there was no loss when they tightened their purse strings. The winning ingredient for their bounce back has been Asia, however, and Kelowna has seen no growth in that segment of the population.
“Vancouver is a great destination for people from mainland China,” said Chrystal, to the roomful of developers and industry experts. “We had that and you didn’t and you couldn’t replace the second home buyer.”
With the Chinese soaking up the excess property inventory that had been price-slashed as deep as 20 per cent, costs rose above previous peaks.
“MLS sales don’t lie, the average price is way up,” he said, adding Kelowna has started to depart from the doldrums of ‘09, but it’s far from an over-heated market.
Compared to peak prices, the average cost of a local single family home is down 12 per cent. The cost of a townhome is 10 per cent lower and condos are 16 per cent cheaper than they were at the peak.
Condominiums are contending with weak pricing because there’s still an over-supply in the valley, and the more than 400 complete, empty and as of yet purchased units sitting on the market will act as an economic hangover.
kathy@kelowna.com
9 Responses to “Lack of immigrants slowing Kelowna real estate recovery”
Tags: Alberta, Kelowna, real estate, UDI
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Unlike the UDI, I am thankful for the recent respite from Kelowna’s rapid growth of the past decade. If local developers don’t like it, they can always pull up stakes and move their operations to Vancouver.
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Hey Zeger,
Why don’t you pull up your stake, and move your operation back to where you came from!
You’re always such a hater. You hate on people who move here, but you yourself relocated to Kelowna.
But of course, you want to shut the doors…and stop development (much like they did in Canmore, only to see real estate prices sky-rocket.)
So in essence, you want the market to sky-rocket here too…just for a different reason.
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I completely agree with you Tammy.
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If this place had anything resembling a China Town, I could see Asians being lured away from Vancouver but as it stands, you can barely find any imports or a good place to eat Chinese in this town. You want to talk curb appeal? How about getting residential zoning away from the Industrial sectors and people might be inclined to settle here permanently. For such an area with great potential, you still have a long way to go to compete with real cities.
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Lets face it, the natural scenery is great here, but our towns are butt-ugly! You’re never sure if you’ll turn the corner and see a mansion or a double-wide, a winery or a junk yard, waterfront condos or a ratty strip mall, an art gallery or a seedy drop-in-center.
Strategic Development and hard-line zoning needs to continue in order to renovate this town. And we need the population growth in order to drive it. Without continued development, we’re all stuck with the ugly mess we have now.
So throw out the welcome mat for the hardworking immigrants and transplants!
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“Tammy Says,
‘Hey Zeger,
Why don’t you pull up your stake, and move your operation back to where you came from!
You’re always such a hater. You hate on people who move here, but you yourself relocated to Kelowna.
But of course, you want to shut the doors…and stop development (much like they did in Canmore, only to see real estate prices sky-rocket.)
So in essence, you want the market to sky-rocket here too…just for a different reason.’
That’s a real simple-minded, cliche-ridden representation of me and what I advocate, and one which reduces me to a characature that the media has created. Do you ever think ever for yourself, Tammy, or do you swallow everything that you hear? I notice that you don’t use your full name in your post. Is that because you are too embarassed? Castanet now requires people to use their full name as do the local newspapers in order to have their letters to the editor published. I think that the editor of this website should follow a similar policy as it makes for better quality commentary and reduces the number of irresponsible statements, like yours.
I’m a hater? That’s news to me, but then you’re working with an image of me that you and others have created and you don’t really know me, do you? You’ve never met or spoken to me, have you?
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Robski says,
“Lets face it, the natural scenery is great here, but our towns are butt-ugly! You’re never sure if you’ll turn the corner and see a mansion or a double-wide, a winery or a junk yard, waterfront condos or a ratty strip mall, an art gallery or a seedy drop-in-center.
Strategic Development and hard-line zoning needs to continue in order to renovate this town. And we need the population growth in order to drive it. Without continued development, we’re all stuck with the ugly mess we have now.”
Some people think that growth and development in Kelowna is turning what once was a beautiful city into a ugly mess. Please read what they are saying about Kelowna on the Salmon Arm blog, Aim Higher Salmon Arm (http://salmonarm.wordpress.com/2010/01/27/paradise-lostkelowna-then-and-now-by-tim-murray/)
By the way, I understand that article by Tim Murray was submitted to Kelowna.com for publication but they chose not to publish it. Could that be because Kelowna.com has a pro-development bias and they didn’t want the public to read it?
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I lived in Kelowna for several decades as it went through the transition from a small, friendly community to a place riddled with drug problems, homeless people, a shiny new Hell’s Angels chapter, street gang activity, and so on.”Tammy” is pretty typical of the new Kelowna, and that sort of person is one of the reasons why I’m glad to have moved away.
No matter the source of prospective home buyers, Kelowna has been sucked into the giant Ponzi scheme of perpetual growth, with spectacular crashes when things go wrong. How many people do people like Chrystal want to stuff into Kelowna? Will it only stop when people are shoulder to shoulder, fighting each other for the next breath of air, and knee deep in human excrement? There are limits to growth, but precious little understanding of that idea exists.
In a post-carbon economy, the larger the city, the less sustainable it will be. As an example of things to come, global gold production peaked several years ago and has been declining ever since, accompanied by a huge increase in prices. Many very learned and reputable voices are saying that oil production has now peaked, with decline and skyrocketing prices coming soon to a pump near you. Canada imports a significant portion of its food supplies. Where do you think food will come from for large cities when the oil to produce fertilizer, run farm equipment, process food, and transport it thousands of kilometres becomes too expensive?
Open your eyes, people.
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I´ll have to, to some extent, agree with the gentlemen about over development and an influx of undesirables in the Kelowna area. I grew up there…but have lived in Europe for the last 15 years. The question is who decides who or what is undesirable? The generation that has retired,is retiring or the one who will retire in 10 years or the young backbone of the workers that make the city run?
When I was a teenager the dreaded “gated communities” invaded our fair city ie Gordon Dr. etc. They were the plague then. Today who cares? Kelowna has always been changing its entire history. We had a fishing industry!!!
Since the 70s the main industry has been tourism and most people have lived well. Kelowna will continue changing for years to come. The older I get the better it was(cliche).
The biggest eyesore is something most people in Kelowna are blind to. Hwy 97. This is an embarrassment.
When I proudly tell people where I´m from…most people have never heard of the place and…rarely when they have they unilaterally ask why such an ugly scar is allowed.
From the airport to the lake one non-stop strip mall.
Ugly,dirty,slow traffic,red lights etc. Plant some trees, flowers,bushes and hide the oceans of cars in parking lots. They are what´s really ugly.
Please continue discussion on the forum: link