'Twice the house for half the money': Why Kelowna, B.C., real estate is booming

Growing up on B.C.'s South Coast, I had a neighbour named Charlie. He was a good-natured American retiree with an aw-shucks grin who kept his speedboat Ready at our dock.

Every year in June, he pulled Ready around to the beach and winched it up on a trailer.

"Well, mister Chris, we're off!"

Every year, in their gold Cadillac, with Ready in tow, Charlie and his wife Florence headed for a magical-sounding place over the mountains. A place called Summerland.

With their Summerland retirement home, Charlie and Flo were part of the first population burst in B.C.'s Okanagan Valley.

Thirty years later, I'm part of the second burst. And I'm not alone. The proof is in the recently released property assessments.

I moved to the Okanagan six years ago to work for the local CBC bureau, and I bought a house in the downtown core. I opened my most recent B.C. Assessment notice to find its value had increased by 16 per cent. It's the biggest jump in the past five years, which have seen a 30 per cent increase overall.

'It's growing 3 times as fast as Victoria and Vancouver'

It's a familiar story around my neighbourhood. Property assessments jumped so dramatically in the Central Okanagan that in December, the B.C. Assessment Authority sent letters to homeowners warning of the imminent spike. And my neighbours aren't retirees like Charlie and Flo. They're yuppies. They drive green Priuses, not gold Cadillacs.

The Okanagan is one of the fastest-growing areas of Canada, and Kelowna is driving that growth.

"It's actually growing twice as fast as the next fastest growing city in B.C., and it's growing three times as fast as Victoria and Vancouver," said Francois Sergerie of Statistics Canada in a 2016 interview.  

And when you consider where the new arrivals are coming from, it's clear they're bringing money.

Sergerie says Kelowna's growth comes mainly from Alberta and the Lower Mainland. Albertan migrants are generally older than 45, and it's safe to assume many are semi-retired and well-heeled.

People coming from Vancouver are mostly under 30 and some of them may be cashing in on Vancouver's incredible real estate boom.

That younger contingent doesn't want to live in the tacky taupe mini-mansions dotting Kelowna hillsides, and they can't afford to anyway. That's put tremendous pressure on single-family homes downtown.  

On average, single-family home prices in Kelowna increased 11 per cent this year. But it's more dramatic in the downtown's hip and gentrifying North End, where many properties have increased 15 to 20 per cent.

"Whenever values go up, it starts in the core," said Shawn Worsfold, a leading Kelowna realtor. "Downtown and the North End have been hot markets this year."

That demand means supply is dwindling.

Vancouver spillover

"In the past year, there's been a 29 per cent drop in inventory," said Worsfold. "At the same time, there's been a 21 per cent increase in sales."

That increase is even more dramatic in the $600,000 to $1 million range, where the number of sales increased 90 per cent.

"That's a spillover from Vancouver," said Worsfold.

For new arrivals who can't live downtown, outlying communities that retain a rural feel are becoming more attractive.

In West Kelowna, Peachland and Summerland, property assessments increased by an average of 11 per cent. Homes in the Lake Country area, just 15 minutes from Kelowna and close to UBC-O and the airport, saw property values jump 16 per cent.

Those numbers are still a far cry from Greater Vancouver, where most properties increased 30 to 40 per cent.

'People can't believe what they can get'

And statistics suggest that Kelowna property values might still have room to grow, especially if people flush with cash continue to move from Vancouver.

According to a recent report by the Canada Mortgage and Housing Corporation, this "would likely push average prices closer to the top of the wide forecast range as buyers migrating from this region may bring with them significant purchasing power which could push prices higher,"

Despite the increase in property values in the Okanagan, for young people in inflated markets, it's still an attractive trade.

Imagine a working couple who can afford a home like mine, and who prefer a commute that's 30 minutes or less.

In Greater Vancouver, they could afford an apartment, or one of eight townhomes currently listed under $500,000 — all under 800 sq. ft. — but not a single-family home.

In the Central Okanagan, that same couple currently has 24 single-family homes to choose from — some of them over 2,800 sq. ft.

"People can't believe what they can get," said Worsfold, who says his clients from the Lower Mainland "can buy twice the house with half the money."

Vancouver property values have fallen since the assessments were taken in July. Worsfold thinks prices have continued to rise in the Okanagan since the summer. He says someone selling a million-dollar home and relocating to Kelowna will still be surprised what they can get.

"A million dollars around here gets you a Taj Mahal."