After running red-hot for several years, an economist says the Okanagan’s housing market is in for a prolonged cooling period.
Pierre Cleroux is the lead economist with the Business Development Bank of Canada. Speaking at a Kelowna Chamber of Commerce Breakfast on Thursday morning, Cleroux says housing prices across the country have peaked and will remain flat over the next few years. He attributes the decline to a number of factors, including B.C.’s speculation tax.
WATCH MORE: The BDC’s chief economist, Pierre Cleroux, says Canada’s economy will continue to grow, as it is supported by higher exports and very good business investments levels.
“I think this is a cool period that is going to continue. We had a very strong period for four years. Strong demand with a lot of sales, now it’s slowing down,” said Cleroux. “As interest rates are increasing, as we have new rules for stress test at the federal level and a new tax on foreign investment, we can see that the number of sales has really declined this year. We believe this trend is going to continue. So it’s basically a soft landing of the housing market.”
That soft landing of the housing market is being reflected in the price. The average price for a house in Kelowna is a little more than $584,000, little changed from a year ago. Prices are expected to drop over the next two years to about $580,000.