Home price at 'all time low'

A South Okanagan realtor believes with interest rates dropping and demand set to grow, this could be one of the last chances to take advantage of lower house prices in the area.

Ken Aitkens, a real estate agent with the Aitkens Group, said with the new cuts in the policy rate by the Bank of Canada recently, and another rate cut expected coming up around Dec. 11, more buyers will be coming to the market.

The Bank of Canada lowered its key interest rate last month by half a percentage point to 3.75 per cent.

"This is an all-time low in the market that we will never see again," Aitkens said. "As high as it feels to most people, I don't foresee anything putting enough downward pressure on the Okanagan market that we will ever see price points as low as this again."

He added while the market is generally quite strong, it will seeing a little bit of a slowdown, which is quite normal for the holiday season.

Once January hits, the expectation is a rebound.

"Traditionally, we see, like a lot of people, if they don't sell their house in the fall, a lot of people take their house off the market just so they don't have to do showings over the Christmas season and then re-list it in the spring. And with that, they usually do a corrective measure on their pricing as well," Aitkens said.

"Around Jan. 15, I predict that we'll see a very fast spring market merge where all the people that have been sitting on the sidelines again will start to take advantage of all the new houses coming back on the market."

More buyers are being invited to the market is some changes recently implemented by the federal government with mortgage qualification rules, allowing for a 30-year amortization period for first-time home buyers (up from the current maximum 25-year amortization) and 30-year amortization period for any buyers of newly-built homes, regardless of whether they are first-time buyers or not.

"That will definitely help people with the affordability aspect, because their monthly payments will obviously be amortized over a longer period of time. And then with lower interest rates, people are going to able to afford a more expensive home, which in the Okanagan, is higher than normal if you look to compare to the rest of Canada," Aitkens said.

The South Okanagan also faces land constraints, which limits the area for new housing builds.

"We don't have an endless supply of new product that comes onto the market and that's where you see a lot of developers now building up, instead of out and in that you have the condo market."

But with increasing development in Penticton, from outside developers building the innovation district to developers now being able to build up to fourplexes on single family development zoning, inventory will continue to grow.

For first-time home buyers, Aitkens said he recommends waiting to see where the Bank of Canada goes with its decreases in interest rates, and how that affects the bank's lending abilities.

Also, he said don't over buy for what you want.

"I see a lot of people and a lot of realtors and a lot of sellers right now grasping still at home prices that their neighbours might have sold at two years ago, and it's really us as real estate agents right now, we're having to have very frank conversations with people about pricing," Aitkens said.

"When you see a property that is priced right, it moves immediately."

If this is the right time for a new purchase, however, he reiterated that prices likely won't be lower than they are right now.

"Anyone who bought pre-COVID is in a very good position and and the market isn't going down by any means, anything below what we've seen before," he added.

"If you’re on the fence, now may be the best time to make your move before more buyers jump in and prices start to rise."