Where do Buyers come from to purchase properties in the Okanagan Valley? If you thought you knew, you may be surprised to learn about some recent shifts as shown in the Okanagan Mainline Real Estate Board (OMREB) statistics for this first quarter of 2016.
The summary highlights are as follows:
- we have seen significant DECREASE in the number of Buyers coming to the Okanagan Valley from Alberta, from other parts of British Columbia (excluding the lower mainland and Vancouver Island), Ontario, Quebec and the maritimes, and
- we have seen significant INCREASE in the number of Buyers coming to the Okanagan Valley from the lower mainland and Vancouver Island, Saskatchewan, Manitoba and from outside of Canada.
People come from far and wide to buy homes here in this place I love to call Paradise, the Okanagan Valley. As we see shifts and changes in the global, national and regional economies it is interesting to observe how it affects where the Buyers come from to buy properties in our local Okanagan Valley real estate market.
As we look at the regions that show a derease in the numbers of Buyers coming to our area it should be no surprise to see that Buyers from Alberta have dropped off the most. In the 1st quarter of this year, we saw 46.8% fewer Buyers coming here to purchase properties than we saw in the 1st quarter of 2015. That significant drop is easy to understand when we see how the drop in global oil prices has affected employment in the oil industry.
It should also come as no surprise to see how that same global oil price phenomenon has impacted the northern regions of BC where local economies are also largely dependent on oil. In the 1st quarter of this year we saw a 37% drop in the number of Buyers coming to the Okanagan Valley from other parts of BC outside of the lower mainland and Vancouver Island.
By contrast, it is intersting to observe the difference in the motivations of the few remaing Buyers that are coming here from Alberta and northern BC. From my personal experience working with these Buyers, they are intent on planning for their earlier-than-originally-planned retirement. I hear a lot of... "Why stay in Alberta? We have the only NDP provincial government in Canada and we don't see any big improvements coming to the oil sector in the near future." They are buying Okanagan properties while these properties are still affordable so that they can avoid paying the inevitable higher prices when they retire 5 to 10 years from now.
The areas that are the source of the largest increases in our Buyers are markets outside of Canada. Given the low value of our Canadian dollar, it explains why investors from outside of Canada can see better value to owning real estate in Canada. After all, when compared to the US dollar, it looks like Canada is on sale for half price. Buyers from outside of Canada have increased 70% this 1st quarter from the 1st quarter of 2015.
We have seen a 40.7% increase in the number of Buyers coming to the Okanagan from the lower mainland and Vancouver Island. The most consistenly compelling story that I am hearing is... "Why wouldn't I sell my Vancouver teardown for $2.2 million. I bought it 15 years ago for $465,000, paid down half my mortgage so I'll just put $1.5 million in the bank and buy a nice Okanagan Lake View home for $550,000 and live happily ever after here in Paradise."
The lower value of our currency also makes it more attractive for Canadian Buyers from other parts of Canada to consider investing in the Okanagan Valley as oppsed to the southern US where we saw a lot of our real estate dollars going since 2008. That may explain why we have seen a 27.6% increase in the number of Buyers coming to the Okanagan from Saskatchewan and Manitoba.
The socio-economic stability of Canada combined with the beautiful semi-arid climate of the Okanagan Valley will continue to attract people to our region. This will protect values and encourage continued investment in real estate in the Okanagan / Shuswap region. So continue to feel encouraged about investing in real estate in our Okanagan Valley. Whether you are a new home Buyer, moving up to a bigger home or an investor looking to increase your portfolio, it's a good time to buy property in the Okanagan Valley.