A combination of new immigrants, young professionals and retirees will continue to flood into the Okanagan boding well for the region’s future economic growth, says the vice-president of a leading Lower Mainland real estate sales company.
Andrew Ramlo, vice-president, consulting for the Rennie Group, said that optimism comes coupled with issues created by ongoing growth such as housing affordability and inventory, diversity and inclusion challenges, widening income gaps, and expanding homeless population.
He said the Rennie Group outlook sees a population growth for the Central Okanagan of more than 80,000 residents over the coming two decades, compared to the roughly 70,000 that were added over the past two decades.
“I encourage everyone – developers, planners, politicians, the general public – to consider how the great range of opportunities that are currently being presented to the region can be leveraged to help address some of the challenging issues that have and will continue to arise,” said Ramlo.
Ramlo made the comments as a keynote speaker at a recent Urban Development Institute Okanagan webinar, speaking about the future of the real estate development industry in Kelowna post-COVID.
“In many ways, to say that Kelowna and the Central Okanagan have weathered the COVID-19 storm well would be an understatement,” he said.
Ramlo cited how on the jobs front, of the 8,300 jobs that were lost during the height of the pandemic, but the region has now gained back 11,000 jobs, which has pushed the region’s unemployment rate down to historical lows.
Relative to a national unemployment rate in the range of 8.7 per cent, he noted the Kelowna metropolitan area now sits at just 4.5 cent.
He said from a people perspective, the region has also seen some of the fastest population growth rates in the country.
Posting a 1.9 per cent growth rate in 2019-20, the region grew by 4,000 residents – eclipsing growth seen in many other major metro regions across the country.
“This is being reflected in the region’s real estate market. While still falling below 2016’s peak, residential sales in 2020 were up 25 per cent over last year, and more than 20 per cent above the past decade’s average,” Ramlo said.
“Inventory, however, has moved in the opposite direction. Relative to 2019, total inventory was down by four per cent.
“To the degree that sales can be equated to demand, and inventory to available supply, Econ 101 would tell us that this situation would lead to rising prices – and it certainly has. Through 2020, average housing prices in the region increased by 17 per cent.”
But Ramlo added he is cautious not to say that “everything is rosé” in wine country.
“From a housing perspective, Kelowna and the Central Okanagan suffer from a housing availability and affordability crisis – issues that will only grow if the supply of new housing does not keep up with expected demand,” he said.
“Consider, for example, that both building permits and housing starts for the region are currently well below historical averages. This does not bode well for housing supply in the near and medium terms.”
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