I have been reading the special report, on the Canadian Housing Market, from the TD Banks Economics Department today.
Over the medium term they are predicting a correction in some markets, and their reasons why. They then give detailed report on various specific markets - including Vancouver, Calgary and Edmonton.
What is interesting is that they have now also amended their forecast for rising interest rates to January 2012.
To read the full report please go to - http://www.td.com/economics/special/sg0711_housing.pdf
How do I feel this will affect the real estate market in Kelowna?
In this report, the Bank is forecasting a fall in first time buyers. These buyers are very important to any real estate market, and have definitely been active in the Central Okanagan this last year.
This would have a negative effect on demand, however, I believe some of this will be offset by investors, as Kelowna has already undergone quite a correction in its pricing, and there is some good value product available - particularly if the investor is looking to 'hold' for the long term.
I am sure some investors are waiting to see whether the market is going to fall further. One of the questions they need to answer is - if they are borrowing to facilitate a purchase, what will the increased cost of their financing be(if they wait), as interest rates are going to rise. Will that cost be offset by a larger fall in price?
If you have any questions about this article, or the Kelowna Real Estate market in general, please feel free to contact me.
Tel 250 864 1707