Much has been reported about the resale residential housing market in the Central Okanagan; inventory is down, sales are increasing and prices are rising. To put this into perspective, today’s inventory levels are lower than they were at the still height of the market in 2007 with sales closing in on similar levels and prices higher than they were back then. This is all great for the resale market but what does this do to the new home market?
Remember in the mid-2000s when it was quite common for new home introductions to sell-out quite quickly, particularly the condo market? Back in 2007 there were 10 active hi-rise condominium projects in the market representing close to 1,100 suites. Similarly, there were 33 active low-rise condominium projects representing close to 5,000 suites. Over the past seven years, the majority of this inventory, either through sales, terminated projects, receiverships or converted to rental suites, have been absorbed with minimal new offerings to take its place.
Recently, there have been several multi-density land sales and even expected new introductions of both new hi-rise and low-rise product coming to the market. The question is “Are we close to being back to the boom-years of the mid-2000s?” Is the market ready for the cost of hi-rise concrete construction? Will there be too many low-rise projects introduced at the same time? We know that there is a strong local market but is the external market, particularly those in Alberta, ready to purchase discretionary properties?
Without a doubt there are significant opportunities out there for new home introductions primarily dictated by low inventory levels. When you factor in increasing sales and higher price levels in the resale sector, it will make new home offerings quite attractive. Are we ready for the next boom?