Vernon Housing Market Remains Strong
Construction of new homes in Vernon continues to fuel the local economy despite a slight dip in overall starts compared to last year, according to the Canada Mortgage and Housing Corporation.
Vernon’s housing starts jumped slightly in October compared to the same time last year. There were 29 new homes and two multi family projects undertaken in October. That is a seven per cent jump from last year. But while October numbers are up, overall Vernon has seen a six per cent drop in overall starts compared to 2004.
There has been 354 overall new housing units and multi-family complexes started in 2005 compared to 376 for the 10 months of 2005. But despite the slight drop, the overall market remains strong, according to Paul Fabri, CMHC market analyst. He said market fundamentals remain solid.
“Home builders are working flat out to meet demand,” said Fabri. “However, rising costs and delays due to production constraints have become challenges for the industry.”
He said strong employment growth has, in turn, spurred in migration, which is fueling demand for both new and resale housing. Fabri said retirees and other seeking new and resale housing. Fabri said retirees and others seeking life-style oriented housing have also contributed to demand. The CMHC is expecting 2005 to be the first year that multi-family construction. According to CMHC statistics, national housing starts were above the 200,000 mark for the 29 consecutive months.
But while the housing market has dropped slightly in 2005 compared to 2004’s record-setting pace, housing costs are expected to climb in the area in 2006.
A recent report released by Re/Max, The Housing Market Outlook 2006, finds that while most areas in the country will experience moderate appreciation of about two to five per cent, Kelowna can expect increases of close to 10 per cent. The average price for a house in Kelowna is projected to be $258,600 in 2005, $12,000 above the national average. It is expected to reach $284,500 in 2006, according the report.
New housing starts in Vernon are up seven per cent in October 2005 compared to the same time last year, according to the Canada Mortgage & Hsoung Corporation.
“Affordability has increasingly been a major concern,” said Elton Ash, regional executive vice president of Re/Max for Western Canada. “Particularly in markets in B.C., where average price has experienced strong upward momentum throughout 2005 due to tight inventory levels.”
Ash said an influx of new listings in the marketplace should ease some of the upward on housing values and allow purchasers the luxury of time when buying a home.
According to the report, Western Canada is benefiting from the thriving oil and gas-related industries. In addition, new policies on immigration will play a role. Canada is set to open the door to as many as 255,000 new imigrants in 2006. The report said most new immigrants tend to purchase a house within years of arriving in Canada.
Satisfied clients
)