kelowna cma housing market outlook...source: bc stats, p.e.o.p.l.e. 2015, kelowna cma & local...
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Housing market intelligence you can count on
Kelowna CMA
Housing Market Outlook
Taylor Pardy
Senior Market Analyst
CANADA MORTGAGE AND HOUSING CORPORATION
Kelowna Housing Outlook
Economic overview
Resale market
New construction
Housing market outlook
CANADA MORTGAGE AND HOUSING CORPORATION
Canadian dollar holding steady at a lower level
Labour markets in southern BC improving
Population has been expanding in many centres
Stronger migration to BC from other provinces
Mortgage interest rates remain historically low
Foreign Buyers Tax on Lower Mainland
Key considerations for the market in 2016 and beyond
CANADA MORTGAGE AND HOUSING CORPORATION
2
3
4
5
6
7
8
2008 2009 2010 2011 2012 2013 2014 2015 2016
Net Migration is Declining
4.70-6.00%
3.00-3.80%
Selected mortgage interest rates, per cent
Source: Bank of Canada historical, CMHC Forecast
5-year posted
1-year posted
Mortgage interest rates to rise gradually in late-2017
2016F
CANADA MORTGAGE AND HOUSING CORPORATION
Over 80,000 more jobs in BC in 2016
2,200
2,250
2,300
2,350
2,400
2,450
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
2016
YTD +3.5%
+80,500 Jobs
Employment (3 mo avg), Thousands
2015
By Occupation Sales & Service +28K
Health +21K
E,L,S,C & G +11K
Trades, Trans & Equip
+8K
N & A Sciences +7K
Source: Statistics Canada, Labour Force Survey, E,L,S,C & G: Education, Law, Social, Community and Government.
CANADA MORTGAGE AND HOUSING CORPORATION
Unemployment rate tracks Alberta, but moving downward in 2016
Sources: Statistics Canada, last data point August 2016
Unemployment Rate, Seasonally Adjusted (%)
Alberta (8.4%)
BC (5.5%)
0
2
4
6
8
10
12
2005 2007 2009 2011 2013 2015
Kelowna (7.4%)
CANADA MORTGAGE AND HOUSING CORPORATION
Large centres driving employment gains in BC
7
-2.2
-1.5
-4.8
-1.6
-2.2
1.9
5.9
-2.8
3.8
-2.0
6.0
-8 -6 -4 -2 0 2 4 6 8
Northeast
North Coast/Nechako
Kootenay
Cariboo
Thompson/Okanagan
Vancouver Island/Coast
Mainland/Southwest
Kelowna
Victoria
Abbotsford-Mission
Vancouver
% change January to August, 2016 compared to 2015
Source: Statistics Canada, Labour Force Survey
Employment, year-over-year
CANADA MORTGAGE AND HOUSING CORPORATION
New households drive housing demand
Source: BC Stats, P.E.O.P.L.E. 2015, Kelowna CMA & Local Health Areas, CMHC calculations
Annual Household Projections
for 2016 - 2020
Kamloops Salmon Arm
Vernon
Kelowna CMA
Penticton
1,575
209
365
153625
CANADA MORTGAGE AND HOUSING CORPORATION
Strong population growth is a key driver of housing market activity
Population Growth Rate from 2014 to 2015 – Canadian CMA`s
Source: Statistics Canada – Population of census metropolitan areas
-0.5
0
0.5
1
1.5
2
2.5
3
3.5
CANADA MORTGAGE AND HOUSING CORPORATION
Driven by stronger net-migration
$0
$100,000
$200,000
$300,000
$400,000
$500,000
-1000
0
1000
2000
3000
4000
5000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Components of Population Growth - Kelowna CMA
Interprovincial Intraprovincial International
Natural MLS Average Price
Source: Statistics Canada, Okanagan Mainline Real Estate Board (OMREB)
CANADA MORTGAGE AND HOUSING CORPORATION
Migration of young professionals and seniors tracks multi-unit housing demand
Source: Statistics Canada – CANSIM Table 051-0057
Net Migration by Age Group (2007 & 2008 vs 2014 & 2015) - Kelowna CMA
-200
0
200
400
600
800
1000
12002007 & 2008 2014 & 2015
CANADA MORTGAGE AND HOUSING CORPORATION
New publication put out annually - HMI
12
Released August 2016
Kelowna CMA Report
Resale Market
Resale Market
CANADA MORTGAGE AND HOUSING CORPORATION
MLS Sales significantly stronger in 2016
Annual MLS® Sales – Kelowna CMA
Source: Okanagan Mainline Real Estate Board (OMREB)
0
1000
2000
3000
4000
5000
6000
10 Year Average
+29%
CANADA MORTGAGE AND HOUSING CORPORATION
Pace of sales pushes past previous peak in 2007
0
1000
2000
3000
4000
5000
6000
7000
8000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Okanagan Mainline Real Estate Board (OMREB), CMHC calculations.
Note: The trend is the three month moving average of the monthly seasonally-adjusted annual rates of sales,
which is the annual total that would result if the pace of sales in a given month continued for an entire year.
Trend in MLS® Sales – Kelowna CMA
CANADA MORTGAGE AND HOUSING CORPORATION
Key ratio moves out of balanced territory in 2016
0
10
20
30
40
50
60
70
80
90
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Kelowna CMA MLS ® Sales to New Listings Ratio, seasonally-adjusted 3MMA
Source: Okanagan Mainline Real Estate Board (OMREB), CMHC calculations, August 2016 latest data point
Note: Trend measure above is based on the seasonally adjusted three month moving average.
Balanced Market
CANADA MORTGAGE AND HOUSING CORPORATION
Active Listings Trend Down as Sales Volume Increases
0
500
1000
1500
2000
2500
3000
3500
4000
4500
0
100
200
300
400
500
600
700Sales Active Listings
Total Residential MLS® Sales and Active Listings – Kelowna CMA
Source: Okanagan Mainline Real Estate Board (OMREB)
Sales Active Listings
CANADA MORTGAGE AND HOUSING CORPORATION
Market conditions moved by higher sales, lower active listings
0
10
20
30
40
50
60
70
80
2008 2009 2010 2011 2012 2013 2014 2015 2016
Vancouver
Kelowna
MLS ® Sales to Active Listings Ratio, seasonally-adjusted 3MMA
Source: Okanagan Mainline Real Estate Board (OMREB), Real Estate Board of Greater Vancouver (REBGV),
Victoria Real Estate Board, CMHC calculations, August 2016 latest data point
Note: Trend measure above is based on the seasonally adjusted three month moving average.
Balanced Market
Victoria
CANADA MORTGAGE AND HOUSING CORPORATION
Market conditions tighter across all segments in Kelowna
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%Single-detached Townhouse Apartment
Balanced Market
Source: Okanagan Mainline Real Estate Board (OMREB)
MLS ® Sales to Active Listings Ratio, seasonally-adjusted 3MMA
CANADA MORTGAGE AND HOUSING CORPORATION
Average prices move upward across all segments
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000Single-detached Townhouse Apartment
Source: Okanagan Mainline Real Estate Board (OMREB), CMHC calculations, Aug. 2016 latest data point
Kelowna CMA - MLS® Average Prices (weighted averages)
CANADA MORTGAGE AND HOUSING CORPORATION
Single-detached sales shifted to higher end in 2016
Single-detached MLS® Sales by Price Range – January to August
0
100
200
300
400
500
600
700
800Sales, Number of 2015 Sales, Number of 2016
Source: Okanagan Mainline Real Estate Board (OMREB), August 2016 latest data point
CANADA MORTGAGE AND HOUSING CORPORATION
Median sale price gap between resale and new home market closes
Median Sales Prices for Single-detached Units – Resale and New
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000Median Price - Resale Median Price - New
Source: Okanagan Mainline Real Estate Board (OMREB) and CMHC Absorbed Unit Prices
CANADA MORTGAGE AND HOUSING CORPORATION
Housing Market Assessment (HMA)
Weak Moderate Strong
HMAFramework
New Home Construction
2
4
CANADA MORTGAGE AND HOUSING CORPORATION
New construction significantly stronger in 2016
Units
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2007 2009 2011 2013 2015 YTD
2015
YTD
2016
Multiple Family Starts
Single Detached Starts
New Household Formations
Sources: CMHC, BC Stats P.E.O.P.L.E. 2015 Household Projections, calculations by CMHC.
CANADA MORTGAGE AND HOUSING CORPORATION
Rental apartments and condominium construction account for most growth
Housing Starts by Dwelling Type and Intended Market – January to August 2016
Source: CMHC Starts and Completions Survey, August 2016 last data point
0
50
100
150
200
250
300
350
400
450
500
Single-detached Semi-detached Row Apartment
Homeowner Rental Condo
CANADA MORTGAGE AND HOUSING CORPORATION
New construction up significantly in most sub areas
City of West Kelowna
160 units (+116%)
First Nations Reserves50 units (-37.5%)
Peachland
20 units (+25%) City of Kelowna
1,043 units (+97%)
Lake Country
101 units (+10%)
Central Okanagan RDA
32 (-3%)Kelowna CMA
2015 = 1,280 units (-2%)
YTD 2016 = 1,406 units (+70%)
Note: Information above is based on year-to-date housing starts, last data point August 2016
CANADA MORTGAGE AND HOUSING CORPORATION
Completed and Unsold Units - Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2016 last data point
Multi-unit inventories of unsold units remains low in 2016
0
100
200
300
400
500
600
700
Jan-0
6
Aug-
06
Mar
-07
Oct
-07
May
-08
Dec-
08
Jul-09
Feb-1
0
Sep-1
0
Apr-
11
Nov-
11
Jun-1
2
Jan-1
3
Aug-
13
Mar
-14
Oct
-14
May
-15
Dec-
15
Jul-16
Single Semi-Detached Row Apartment
0 Apt Inventory
throughout 2016
CANADA MORTGAGE AND HOUSING CORPORATION
Units Under Construction - Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2016 last data point
Future supply of multi-unit homes picking up in 2016
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Jan-0
6
Aug-
06
Mar
-07
Oct
-07
May
-08
Dec-
08
Jul-09
Feb-1
0
Sep-1
0
Apr-
11
Nov-
11
Jun-1
2
Jan-1
3
Aug-
13
Mar
-14
Oct
-14
May
-15
Dec-
15
Jul-16
Homeowner Rental Condo
CANADA MORTGAGE AND HOUSING CORPORATION
Condominiums Under Construction - Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2016 last data point
Apartment condominium construction low relative to previous peak
0
500
1000
1500
2000
2500
3000
3500
Jan-0
6
Aug-
06
Mar
-07
Oct
-07
May
-08
Dec-
08
Jul-09
Feb-1
0
Sep-1
0
Apr-
11
Nov-
11
Jun-1
2
Jan-1
3
Aug-
13
Mar
-14
Oct
-14
May
-15
Dec-
15
Jul-16
Semi-Detached Row Apartment
CANADA MORTGAGE AND HOUSING CORPORATION
Rentals Under Construction - Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2016 last data point
Apartment rentals under construction at an all-time high
0
100
200
300
400
500
600
Jan-0
6
Aug-
06
Mar
-07
Oct
-07
May
-08
Dec-
08
Jul-09
Feb-1
0
Sep-1
0
Apr-
11
Nov-
11
Jun-1
2
Jan-1
3
Aug-
13
Mar
-14
Oct
-14
May
-15
Dec-
15
Jul-16
Laneway/Carriage Home Apartment Rentals
CANADA MORTGAGE AND HOUSING CORPORATION
Rental vacancies moved lower in 2015
$0
$200
$400
$600
$800
$1,000
$1,200
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2000 2003 2006 2009 2012 2015
Vacancy Rate Average Two Bed. Rent
Apartment Vacancy Rate
Per Cent
Average Two
Bed. Rent
Source: CMHC Fall Rental Market Survey – October 1990 to 2015
Primary Rental Market Statistics – October 2015
Rental Condominium
Vacancy Rate
2.1%
Rental Condominium
Universe
3,136 unitsOut Of
12,730
condominium units
CANADA MORTGAGE AND HOUSING CORPORATION
Rental Completions between October Rental Surveys - Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2016 last data point
Rental completions not anticipated to lift vacancy rates until 2017
0
50
100
150
200
250
300
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
CANADA MORTGAGE AND HOUSING CORPORATION
A rising number of housing starts is expected in
2016 with some leveling off in 2017.
Multi-unit homes are expected to make up a
greater portion of total starts over the forecast
horizon.
MLS® prices to move higher; sales are forecast to
move higher in 2016 and then stabilize above the
10-year average in 2017.
2014 2015 2016F 2017F
Annual Starts 1,311 1,280 1,420 - 1,580 1,290 - 1,510
Annual MLS® Sales 4,886 5,378 5,720 - 6,080 5,330 - 6,070
Average MLS® Price$425,996
+7.0%
$435,261
+2.2%
$446,500 -
$453,500
$452,500 -
$467,500
Sources: Kelowna CMA Spring 2016 Housing Market Outlook Report, CMHC, OMREB
Kelowna Housing Market Summary
CANADA MORTGAGE AND HOUSING CORPORATION
Housing Market Information Portal
4 Ways to Access Info:
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CMHC publications.cmhc.ca/hmiportal
CANADA MORTGAGE AND HOUSING CORPORATION
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CANADA MORTGAGE AND HOUSING CORPORATION
For More Information Contact:
Taylor Pardy
Tel: 604-737-4062
cmhc.ca/housingmarketinformation
cmhc.ca/hmiportal
Thank You!