Okanagan real estate market volatility calms down
The impact of climate change has entered the conversation people have when deciding to buy a home.
And that’s a good thing, says the executive vice-president of RE/MAX Canada, which is based in Kelowna.
Elton Ash says the impact of climate change is already being felt by homeowners through displacement due to catastrophic events, higher insurance rates and compromised livability.
“Real estate tends to always be about interest rates and housing affordability, but you also have to take a more holistic approach, especially in British Columbia with what we’ve seen in recent years with the wildfires, river weather and flooding in Merritt and the Sumas Prairie,” Ash said.
“A Leger poll found that 49% of Canadians today are concerned about fires, floods and other weather-related events…so consumers are increasingly aware of these issues and are taking into account elements such as past history, floodplain issues and infrastructure adaptation.”
Ash said real estate agents must also adapt to these changes, to help guide clients through these real estate education issues.
“We need to work with buyers and sellers to resolve these issues that are not obviously visible…this is something that the whole real estate industry is working on, not just us, but we are trying to be industry leaders as a brand. ”
The climate change report is the second of five presentations planned this year, in collaboration with relevant subject matter experts launched by RE/MAX Canada regarding economic policy decisions, climate change and the future of work.
The climate change report included contributions from Kathryn Bakos, director of finance and climate science at the Intact Center on Climate Adaptation, and Mike Moffatt, director of policy and innovation at the Institute for Prosperity. smart.
The key findings of the report are recognition of an immediate need to fund and invest in the restoration and modernization of Canada’s green infrastructure such as wetlands, grasslands and brown infrastructure, including sewage systems ; and to protect real estate from the disruptions of climate change with new levels of transparency in buying and selling homes in assessing a property’s climate risk.
“It’s much cheaper to take action to prevent climate change than to react,” Ash said.
Climate change aside, Ash acknowledges that a recent spike in interest rates continues to dominate the conversation in the real estate industry, saying buyers and sellers need to take a step back.
Coming out of COVID, the Okanagan real estate market entered a meteoric boom phase, with several deals dropped on single-family homes within two days of hitting the market, and low inventory causing prices to spike dramatically. housing prices.
Ash explained that the current trend is to see inventory rise as sales fall due to rising interest rates and mortgage approval stress-testing measures already in place.
“You’ll see a 10-15% drop (in prices) from what we’ve seen in the last two years, but for those of us who’ve owned a home during that time, the price has still increased by 35%, so it’s a relative thing,” Ash said.
He sees a return to a more balanced real estate market, albeit somewhat regionally skewed by the influx of people from across Canada wanting to live, work, and retire from the Okanagan way of life.
Another interest rate hike is likely for September, according to Ash, but he sees long-term interest rates stabilizing in the 5-6% range, saying interest rates below inflation are not a long-term reality.
Ash reiterated a position from his industry that Canada is experiencing a housing shortage that governments at all three levels have failed to respond to adequately over the past few decades.
“Housing is becoming scarce at a time when immigration is opening up again where we will see 1.2 million people arrive in Canada over the next three years, Canada remains an attractive country in the world to live and we let’s continue to have strength in our overall economic base,” he said.
READ MORE: Skyrocketing Okanagan real estate sales
Like us on Facebook and follow us on Twitter.