Winter has come early for the South Okanagan’s real estate market, with the average cost of properties down in October from the month before.
In 2016, property values rose steadily through to October, before taking its annual winter dip in November, but this year’s stats are showing an early drop in property values.
One hundred ninety-one residential property sales, on average, went for just under $408,000 in October, making a drop of $13,000 from September’s average. In September, too, 225 residential properties were sold, compared to just 191 in October, and new listings were also down.
Related: High demand and few listings cause soaring house prices
“We didn’t have the interest rates go up in September (last year) like we did this year,” South Okanagan Real Estate Board president Pamela Hanson said, referring to the Bank of Canada’s interest rate hikes this summer.
“Which is funny, because they’re threatening to change the interest rates again to at least change the benchmark of how they’ll determine whether a person can afford a mortgage in January.”
Hanson said because of the tighter regulations expected for early 2018, now could be a better time to sell.
If a buyer is able to remove subjects from the sale property by December, Hanson said that person would be able to get that mortgage rate set at the current rates, but if they aren’t able to remove subjects until after the changes, they will be stuck with the new rates.
Related: Many motel sales signal strong real estate market
The South Okanagan is still looking set for a record year of real estate sales, having cracked the $1 billion mark last month.
Last year marked the first year the South Okanagan saw more than $1 billion in real estate sales, setting a record at $1.122 billion. That’s a record this year appears poised to beat, at $1.053 billion with two months left to go.
In fact, if November sees just $70 million trade hands over real estate, the region will have set a new record.
Just looking at Penticton, where the average single-family home has gone up in price since September, this year’s $475,000 has already topped 2016’s record-setting sales by $5,000.
Related: Cost of housing continues to skyrocket in South Okanagan
But with the recent bumps to the interest rates and the changes set for January, Hanson said she’s not sure how next year will fare.
“It will just be interesting to see what happens. I mean, we’re still in an area where people are coming, and they’re coming for reasons that may not be affected by a mortgage, because boomers have the biggest amount of savings out of anybody so far,” Hanson said.
“They’re coming here because we have nicer weather compared to other areas of Canada, so we still have that going for us.”
Related: Property values make South Okanagan attractive to buyers
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