Kelowna Upper End Market
Luxury home sales decline
by Castanet Staff - Story: 42035
Sep 26, 2008 / 5:00 am
Luxury homes sales are up in many markets across Canada, but not in the Central Okanagan.
The RE/MAX Upper-End Report, which highlights trends and developments in 15 housing markets across the country, found sales declined in Kelowna, Calgary, Edmonton, Hamilton-Burlington and Toronto during the first seven months of the year.
Upswings in sales activity was reported in Vancouver, Victoria, Regina, Saskatoon, Winnipeg, London, Kitchener-Waterloo, Ottawa, Halifax-Dartmouth, and St. John's.
"In two-thirds of the markets we surveyed, demand for upscale homes surpassed peak levels reported last year," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.
"However, with supply edging higher in most major centres and few markets reporting tight inventory levels, we are seeing a return to more balanced conditions. This situation is expected to have an impact on high-end values in coming months, especially in areas that have experienced consistent double-digit growth."
Michael Polzler, Executive Vice President and Regional Director for RE/MAX Ontario-Atlantic Canada, says although the top-end of the market represents less than five per cent of total sales, activity is generally a gauge of overall market conditions.
"The market for luxury homes is usually the first to show pressure cracks, but the reverse is actually true this year, with pent-up demand (due to trade-up activity), less speculation, and job transfers all factors contributing to stability in this segment. That being said, we feel uncertainty in financial markets both here and abroad will give purchasers cause for concern in the immediate future," says Polzler.
The Upper-End report shows an 11 per cent decrease in sales of Kelowna homes in the $1 million price point with 63 being sold so far this year as compared to 71 during 2007.
Most expensive MLS sale (2004) - $4 million (Lower Mission/Seclusion Bay)
Most expensive MLS listing - $6.4 million (North Glenmore)
Kelowna is on track to record its best year ever for sales of homes priced over $1 million. The previous record was set in 2003, when 21 such homes changed hands. In the first eight months of the year, 19 million-dollar-plus homes were sold - a 26.6 per cent increase over the same period in 2003 - virtually guaranteeing a new benchmark for 2004.
Baby boomers continue to be the primary drivers behind the activity as equity-rich homeowners trade up to larger or more expensive homes while conditions remain favourable. The most expensive home listed to date is a sizable acreage property, offering its own orchard and a large home in the North Glenmore area priced at $6.4 million. If purchasers are looking for a more traditional upper-end property, they may look to Crawford Estates, where a 26,000 sq.ft. mansion can be had for $5.58 million.
To date, the most expensive properties sold through MLS went for $4 million each - one was located on waterfront in Lower Mission, while the other was at Seclusion Bay in Westbank.
The most prestige areas in Kelowna continue to be Lower Mission and Dilworth Mountain Estates. Gaining in popularity are acreage properties that are particularly attractive to those with an affinity for horses and ranching. Purchasers are generally looking for turnkey properties, and very few are willing to compromise or adjust expectations in this price range. Ninety per cent of homes are now renovated in the upper end prior to being listed for sale.
Inventory remains tight in Kelowna. Yet, multiple offers have become the exception, rather than the rule. A substantial amount of large, custom homes are cropping up, particularly in the Upper Mission and Crawford Estates areas, primarily as a result of losses in last summer's fires. Most homeowners have chosen to build larger, more posh homes to replace those that were damaged or destroyed. Demand is expected to remain strong through to year-end and into 2005.
- Information taken from RE/MAX Upper End Market Trends Report 2004