The high end buyer is playing a significant role in Kelowna’s housing market and it’s playing havoc with our averages. Over the first half of 2017 there were 164 homes that sold over $1 million which represented 10.5% of the total homes sold (1,561). Compare and contrast to only five years ago when the million dollar plus home sales represented 2.8% of the overall market. Going back even further, ten years ago the million dollar plus market was 1.2% of the overall market.
Kelowna Homes Over 1 Million
Average Home Sale Price Over $700,000
So what happened? Is this a good thing for our community? Will it continue? I remember a time when a million dollar home was talked about in our office with people curious about who the buyer was and even more curious about the home. These days, although a million dollar home sale is still a lot of money and the home is likely going to be nice, it doesn’t have the same impact as it once did. With 164 of these homes selling so far this year, it’s pushed our average sale price to over $700,000 making it unrealistic for local first time buyers to enter the marketplace in a detached house, and oftentimes even unrealistic for them to gain entry into the market with even a condo unless they have significant help from a parent.
This trend will surely continue indefinitely as prices in the rest of Canada continue to rise and equity rich buyers from other parts of the country either relocate here for employment or retire. There will be bumps and bruises along the way as interest rates and energy prices impact housing prices in Kelowna but the trend is upward and there doesn’t seem to be any slowdown on the horizon.