Robert Zoost reports that big, eastern investors have started to buy up Kelowna apartments
By: AB Newswire
December 07, 2021 at 16:06 PM EST
Robert Zoost Kelowna Real EstateRobert Zoost has revealed a housing assessment that buying a home in Kelowna is now out of reach for most people. The Regional District of Central Okanagan (RDCO) was the one who conducted the study.
The report also found that single-parent or single-person households will have no chance of purchasing homes at the average price because there are no affordable options for them to purchase. Robert Zoost has gone into full detail of the RDCO report.
Robert Zoost reports that one of a kind of home buying has been making headlines and rising prices of single-family homes. However, another kind of home buying is taking off and it brings big bucks with it: condos.
Toronto-based Canadian Apartment Property Real Estate Investment Trust has entered the secondary market for the first time, by purchasing the 193-unit Lakeview Point apartment complex in West Kelowna. The sale will be one of the largest commercial real estate deals in the area.
"It's not an unusual price" — this is a high-water mark price, according to Kelowna Realator Robert Zoost, one of the A Young realtors who made the deal. For CAP, it's their first buy in that kind of market. Institutional capital is flowing to secondary markets as more and more people flock to these affordable areas.
These big investors have been investing in medium-sized markets, but since COVID-19, they have been all the rage. In February, the Carrington View Apartments in Kelowna sold for $54.05 million. When Avison Young reached deals for the City View Garden Apartments in Vernon for $5.5 million and the Brunswick Manor property in Penticton for $5.25 million, they showed how big investors are interested in Kamloops too.
“I think it’s a combination of a lot of factors,” Buntain said. “There’s been a lot of migration into these areas in particular, Kelowna and Victoria, that’s really accelerated since COVID. Outlying areas like Langford, Nanaimo, West Kelowna, Kamloops and Vernon are starting to become more attractive to private capital that traditionally wouldn’t look there.
The company’s Multi-Family Investment Report lists three properties for sale for $40 million or more in Victoria and Langford by the first half of this year.
Six properties are currently on the market, two of which have undisclosed prices. Four are listed for $50 million or more, and one is $152 million.
“We saw a huge push for rental units because people wanted more space,” Robert Zoost said. “There was a softening in the market because people were leaving downtown Toronto, downtown Vancouver, downtown Victoria. We saw tons of investment activity and institutional capital has recognized that trend. They think it'll keep going for the foreseeable future.
Housing costs are a common and sometimes controversial conversation topic these days. The Okanagan Real Estate Board recently announced that the benchmark price for single family homes reached $961,600 and condominiums reached an average sales price of $477,700 - both up over 20% from last year.
Kelowna has a healthy economy with low unemployment rates yet its salaries are not catching up to the high cost of housing. The median individual income in Kelowna is just over $45,000 per year which is significantly less than the high home prices. This means that many buyers are out of the market, especially young and first-time homeowners.Rental rates have been going up. In November, the average rent for a one-bedroom apartment was $1670 across Canada, a 3.7% increase from just a month before. As a result, Kelowna is now the fourth most expensive city to live in, following only Vancouver, Toronto, and Victoria.
Many young residents in Kelowna have a tough time paying the rent and often have no choice but to stay renting. It’s a common financial adage that one can only spend 30% of their monthly income on rent, but many people are unable to do so. With mortgages becoming more difficult to obtain, many residents rely on renting as a long-term solution. What if there was a way to make a good investment in the market and still stay close to home? Millennial Developments seeks to do just that with their latest venture, Five Crossings. Located centrally in the Capri-Landmark district, this studio, one- and two-bedroom condo building will offer prices starting in the low-$200s. These affordable prices are attracting many first-time homeowners who see an opportunity to buy local property.
“It was really important for us to work with the younger generation,” says Zoost. “We’ve been able to give them a new opportunity to get into real estate and that starts by designing a project that not only offers them quality, affordable housing, but also has the amenities they desire.
Five Crossings offers a variety of communal space and other features that invite residents to live beyond their own four walls. They’ve installed a recreation space with a pool table and golf simulator, as well as a kitchen and bar. They also offer a large co-workspace and tech-friendly features for those who need them, as well as cutting-edge gym equipment. To top it all off, they’ve got a rooftop lounge with covered atrium and an outdoor barbecue center.
Todd Farrer, the director of real estate sales for ACE Project Marketing, just announced that people are excited to see that construction in Kelowna is starting at the $200s. This is a rarity in Kelowna, especially with the design of spaces, location, and amenities. It’s not surprising that registration rates have doubled in one day, as more people are realizing they can invest in themselves while mortgage rates are low.The Okanagan real estate market has been closing in on record-highs for residential transactions this year. Already, the total worth of transactions is nearly double previous totals, and the year's not over yet. The Association of Interior Realtors has reported that for this year, there have been $6 billion worth of deals in the Central Okanagan and $1.8 billion in the North Okanagan, and $1 billion in the South Okanagan.
Prices in the Central Okanagan have increased much quicker than sales. That’s because sales prices are rising faster than the number of sales. For example, in November, a benchmark home in the Central Okanagan changed hands for $979,000, up 33%.
In the North Okanagan, a benchmark single-family home also sold at $704,000, up 31%, and in the South Okanagan it went for $698,000, up 41%. Robert Zoost frequently tweets about the ever-changing housing prices on the Robert Zoost Twitter account.
“It is typical as we approach the holiday season to see residential sales slowdown within the real estate market. The lack of homes available for purchase is certainly adding to the slowdown,” said association president Kim Heizmann in a press release. “As we have seen, there has been a persistent drought of inventory in the market all year as new listings are just not coming on to market quick enough to meet demand.”
So far this year, residential properties in the Central Okanagan have taken an average of 46 days to sell, compared to 77 in the same portion of 2020.
The average in the North Okanagan was 64 days, down from 97, and in the South Okanagan was 77 days, down from 106.
Full report is avaliable on Robert Zoost's here: https://robertzoost.com