Low vacancy and low interest rates drive multi-family housing starts in Kelowna
KELOWNA – Demand for new homes in the Kelowna area continues to be strong, especially for multi-family dwellings such as townhouses and condo units. According to the Canada Mortgage and Housing Corporation’s spring 2015 outlook, the combination of a low vacancy rate and low interest rates is driving this year’s housing starts.
“Demand for new homes will expand in 2015, particularly for multiple units, “says Sarena Teakles, CMHC’s Senior Market Analyst. “A growing population and employment base, combined with tight rental market conditions and low inventories of completed and unabsorbed new homes, will fuel demand for both homeowner and and rental housing over the forecast horizon.”
The forecast calls for 820 new multiple-family units to be constructed this year, compared to 616 in 2014. Multiple family units include semi-detached homes, townhouses and apartments.
Single-detached housing starts remain stable. 695 were built last year. The forecast calls for 680 new houses to be constructed in 2015.
CMHC says the average single-detached home price is expected to decline from $541,898 in 2014 to $525, 000 in 2015. The Housing Corporation says 2014 saw the sale of many homes in excess of $1 million bringing up the average last year. As a result, CMHC says this year’s dollar figure drop does not represent a change in property value. Growth in average prices is expected to turn positive again in 2016 with a predicted average price of $540,000.