kelowna cma housing market outlook...source: bc stats, p.e.o.p.l.e. 2015, kelowna cma & local...

Housing market intelligence you can count on

Kelowna CMA

Housing Market Outlook

Taylor Pardy

Senior Market Analyst

CANADA MORTGAGE AND HOUSING CORPORATION

Kelowna Housing Outlook

Economic overview

Resale market

New construction

Housing market outlook


Canadian dollar holding steady at a lower level

Labour markets in southern BC improving

Population has been expanding in many centres

Stronger migration to BC from other provinces

Mortgage interest rates remain historically low

Foreign Buyers Tax on Lower Mainland

Key considerations for the market in 2016 and beyond


2

3

4

5

6

7

8

2008 2009 2010 2011 2012 2013 2014 2015 2016

Net Migration is Declining

4.70-6.00%

3.00-3.80%

Selected mortgage interest rates, per cent

Source: Bank of Canada historical, CMHC Forecast

5-year posted

1-year posted

Mortgage interest rates to rise gradually in late-2017

2016F


Over 80,000 more jobs in BC in 2016

2,200

2,250

2,300

2,350

2,400

2,450

Jan

Feb

Mar

Ap

r

May Jun

Jul

Au

g

Sep

Oct

No

v

Dec

2016

YTD +3.5%

+80,500 Jobs

Employment (3 mo avg), Thousands

2015

By Occupation Sales & Service +28K

Health +21K

E,L,S,C & G +11K

Trades, Trans & Equip

+8K

N & A Sciences +7K

Source: Statistics Canada, Labour Force Survey, E,L,S,C & G: Education, Law, Social, Community and Government.


Unemployment rate tracks Alberta, but moving downward in 2016

Sources: Statistics Canada, last data point August 2016

Unemployment Rate, Seasonally Adjusted (%)

Alberta (8.4%)

BC (5.5%)

0

2

4

6

8

10

12

2005 2007 2009 2011 2013 2015

Kelowna (7.4%)


Large centres driving employment gains in BC

7

-2.2

-1.5

-4.8

-1.6

-2.2

1.9

5.9

-2.8

3.8

-2.0

6.0

-8 -6 -4 -2 0 2 4 6 8

Northeast

North Coast/Nechako

Kootenay

Cariboo

Thompson/Okanagan

Vancouver Island/Coast

Mainland/Southwest

Kelowna

Victoria

Abbotsford-Mission

Vancouver

% change January to August, 2016 compared to 2015

Source: Statistics Canada, Labour Force Survey

Employment, year-over-year


New households drive housing demand

Source: BC Stats, P.E.O.P.L.E. 2015, Kelowna CMA & Local Health Areas, CMHC calculations

Annual Household Projections

for 2016 - 2020

Kamloops Salmon Arm

Vernon

Kelowna CMA

Penticton

1,575

209

365

153625


Strong population growth is a key driver of housing market activity

Population Growth Rate from 2014 to 2015 – Canadian CMA`s

Source: Statistics Canada – Population of census metropolitan areas

-0.5

0

0.5

1

1.5

2

2.5

3

3.5


Driven by stronger net-migration

$0

$100,000

$200,000

$300,000

$400,000

$500,000

-1000

0

1000

2000

3000

4000

5000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Components of Population Growth - Kelowna CMA

Interprovincial Intraprovincial International

Natural MLS Average Price

Source: Statistics Canada, Okanagan Mainline Real Estate Board (OMREB)


Migration of young professionals and seniors tracks multi-unit housing demand

Source: Statistics Canada – CANSIM Table 051-0057

Net Migration by Age Group (2007 & 2008 vs 2014 & 2015) - Kelowna CMA

-200

0

200

400

600

800

1000

12002007 & 2008 2014 & 2015


New publication put out annually - HMI

12

Released August 2016

Kelowna CMA Report

Resale Market

Resale Market


MLS Sales significantly stronger in 2016

Annual MLS® Sales – Kelowna CMA

Source: Okanagan Mainline Real Estate Board (OMREB)

0

1000

2000

3000

4000

5000

6000

10 Year Average

+29%


Pace of sales pushes past previous peak in 2007

0

1000

2000

3000

4000

5000

6000

7000

8000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Okanagan Mainline Real Estate Board (OMREB), CMHC calculations.

Note: The trend is the three month moving average of the monthly seasonally-adjusted annual rates of sales,

which is the annual total that would result if the pace of sales in a given month continued for an entire year.

Trend in MLS® Sales – Kelowna CMA


Key ratio moves out of balanced territory in 2016

0

10

20

30

40

50

60

70

80

90

100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Kelowna CMA MLS ® Sales to New Listings Ratio, seasonally-adjusted 3MMA

Source: Okanagan Mainline Real Estate Board (OMREB), CMHC calculations, August 2016 latest data point

Note: Trend measure above is based on the seasonally adjusted three month moving average.

Balanced Market


Active Listings Trend Down as Sales Volume Increases

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0

100

200

300

400

500

600

700Sales Active Listings

Total Residential MLS® Sales and Active Listings – Kelowna CMA


Sales Active Listings


Market conditions moved by higher sales, lower active listings

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013 2014 2015 2016

Vancouver

Kelowna

MLS ® Sales to Active Listings Ratio, seasonally-adjusted 3MMA

Source: Okanagan Mainline Real Estate Board (OMREB), Real Estate Board of Greater Vancouver (REBGV),

Victoria Real Estate Board, CMHC calculations, August 2016 latest data point

Note: Trend measure above is based on the seasonally adjusted three month moving average.

Balanced Market

Victoria


Market conditions tighter across all segments in Kelowna

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%Single-detached Townhouse Apartment

Balanced Market


MLS ® Sales to Active Listings Ratio, seasonally-adjusted 3MMA


Average prices move upward across all segments

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000Single-detached Townhouse Apartment

Source: Okanagan Mainline Real Estate Board (OMREB), CMHC calculations, Aug. 2016 latest data point

Kelowna CMA - MLS® Average Prices (weighted averages)


Single-detached sales shifted to higher end in 2016

Single-detached MLS® Sales by Price Range – January to August

0

100

200

300

400

500

600

700

800Sales, Number of 2015 Sales, Number of 2016

Source: Okanagan Mainline Real Estate Board (OMREB), August 2016 latest data point


Median sale price gap between resale and new home market closes

Median Sales Prices for Single-detached Units – Resale and New

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000Median Price - Resale Median Price - New

Source: Okanagan Mainline Real Estate Board (OMREB) and CMHC Absorbed Unit Prices


Housing Market Assessment (HMA)

Weak Moderate Strong

HMAFramework

New Home Construction

2

4


New construction significantly stronger in 2016

Units

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2007 2009 2011 2013 2015 YTD

2015

YTD

2016

Multiple Family Starts

Single Detached Starts

New Household Formations

Sources: CMHC, BC Stats P.E.O.P.L.E. 2015 Household Projections, calculations by CMHC.


Rental apartments and condominium construction account for most growth

Housing Starts by Dwelling Type and Intended Market – January to August 2016

Source: CMHC Starts and Completions Survey, August 2016 last data point

0

50

100

150

200

250

300

350

400

450

500

Single-detached Semi-detached Row Apartment

Homeowner Rental Condo


New construction up significantly in most sub areas

City of West Kelowna

160 units (+116%)

First Nations Reserves50 units (-37.5%)

Peachland

20 units (+25%) City of Kelowna

1,043 units (+97%)

Lake Country

101 units (+10%)

Central Okanagan RDA

32 (-3%)Kelowna CMA

2015 = 1,280 units (-2%)

YTD 2016 = 1,406 units (+70%)

Note: Information above is based on year-to-date housing starts, last data point August 2016


Completed and Unsold Units - Kelowna CMA


Multi-unit inventories of unsold units remains low in 2016

0

100

200

300

400

500

600

700

Jan-0

6

Aug-

06

Mar

-07

Oct

-07

May

-08

Dec-

08

Jul-09

Feb-1

0

Sep-1

0

Apr-

11

Nov-

11

Jun-1

2

Jan-1

3

Aug-

13

Mar

-14

Oct

-14

May

-15

Dec-

15

Jul-16

Single Semi-Detached Row Apartment

0 Apt Inventory

throughout 2016


Units Under Construction - Kelowna CMA


Future supply of multi-unit homes picking up in 2016

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Jan-0

6

Aug-

06

Mar

-07

Oct

-07

May

-08

Dec-

08

Jul-09

Feb-1

0

Sep-1

0

Apr-

11

Nov-

11

Jun-1

2

Jan-1

3

Aug-

13

Mar

-14

Oct

-14

May

-15

Dec-

15

Jul-16

Homeowner Rental Condo


Condominiums Under Construction - Kelowna CMA


Apartment condominium construction low relative to previous peak

0

500

1000

1500

2000

2500

3000

3500

Jan-0

6

Aug-

06

Mar

-07

Oct

-07

May

-08

Dec-

08

Jul-09

Feb-1

0

Sep-1

0

Apr-

11

Nov-

11

Jun-1

2

Jan-1

3

Aug-

13

Mar

-14

Oct

-14

May

-15

Dec-

15

Jul-16

Semi-Detached Row Apartment


Rentals Under Construction - Kelowna CMA


Apartment rentals under construction at an all-time high

0

100

200

300

400

500

600

Jan-0

6

Aug-

06

Mar

-07

Oct

-07

May

-08

Dec-

08

Jul-09

Feb-1

0

Sep-1

0

Apr-

11

Nov-

11

Jun-1

2

Jan-1

3

Aug-

13

Mar

-14

Oct

-14

May

-15

Dec-

15

Jul-16

Laneway/Carriage Home Apartment Rentals


Rental vacancies moved lower in 2015

$0

$200

$400

$600

$800

$1,000

$1,200

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2000 2003 2006 2009 2012 2015

Vacancy Rate Average Two Bed. Rent

Apartment Vacancy Rate

Per Cent

Average Two

Bed. Rent

Source: CMHC Fall Rental Market Survey – October 1990 to 2015

Primary Rental Market Statistics – October 2015

Rental Condominium

Vacancy Rate

2.1%

Rental Condominium

Universe

3,136 unitsOut Of

12,730

condominium units


Rental Completions between October Rental Surveys - Kelowna CMA


Rental completions not anticipated to lift vacancy rates until 2017

0

50

100

150

200

250

300

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


A rising number of housing starts is expected in

2016 with some leveling off in 2017.

Multi-unit homes are expected to make up a

greater portion of total starts over the forecast

horizon.

MLS® prices to move higher; sales are forecast to

move higher in 2016 and then stabilize above the

10-year average in 2017.

2014 2015 2016F 2017F

Annual Starts 1,311 1,280 1,420 - 1,580 1,290 - 1,510

Annual MLS® Sales 4,886 5,378 5,720 - 6,080 5,330 - 6,070

Average MLS® Price$425,996

+7.0%

$435,261

+2.2%

$446,500 -

$453,500

$452,500 -

$467,500

Sources: Kelowna CMA Spring 2016 Housing Market Outlook Report, CMHC, OMREB

Kelowna Housing Market Summary


Housing Market Information Portal

4 Ways to Access Info:

Snapshots of Local,

Regional, and National data.

Compare statistics for

multiple locations.

Comprehensive tables,

map and charts.

Current and archived

CMHC publications.cmhc.ca/hmiportal


Housing Observer Online


For More Information Contact:

Taylor Pardy

[email protected]

Tel: 604-737-4062

cmhc.ca/housingmarketinformation

cmhc.ca/hmiportal

Thank You!

http://www.cmhc.ca/housingmarketinformation

kelowna cma housing market outlook...source: bc stats, p.e.o.p.l.e. 2015, kelowna cma & local...

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