October typically sees a slowdown as we move into the winter months, but this year has been an exception, with activity picking up significantly.   Notably, there were 10 vacant lot sales, which is unusually high for this time of year. This suggests that home builders are gaining confidence in the market and are taking advantage of lower interest rates.   Overall, we're starting to see a shift in sentiment, with signs that the tides are starting to turn. Inflation has dropped to 1.6%, and interest rates have fallen by another 0.5% (50 basis points).   With these positive shifts, buyers appear to be regaining confidence as we move into the later months of 2024 and into 2025.   Single Family Homes Sales jumped significantly for the month of October while new listings slowed, causing upward pressure on home prices. The average price of a single family home increased to $1,191,770 - up 9% from just a month before. Months of inventory dropped from 15 months to 8 months compared to a month before.   Townhomes Townhome prices bumped back up this month, after dropping a bit in months prior. The average price of a townhome in Kelowna currently sits at $725,730. Listing activity is keeping steady which should balance the demand in this area. We currently have 7 months of inventory in the townhome market.   Condos The average price of a condo in Kelowna currently sits at $509,137 - an increase of 11.7% from a month ago. Buyers seem to be aiming for larger square footage in the condo market. There is just 7 months of inventory in the condo market.  

On Wednesday, the Bank of Canada announced a 0.5% (50 basis points) reduction in its policy rate, bringing the overnight interest rate down to 3.75%. With inflation now below the target of 2%—currently at 1.6% as of September—the Bank aims to invigorate the economy. Governor Tiff Macklem emphasized the need for stronger economic growth. This marks the fourth rate cut since June, highlighting a consistent downward trend in interest rates. Economists are already forecasting another potential cut in December. Younger workers continue to face high unemployment rates, and business hiring has been sluggish. The reduction in interest rates is expected to lower borrowing costs, encouraging both consumers and businesses to increase their spending. Economic growth is projected to rise to 2.1% in 2025 and 2.3% in 2026. The Bank of Canada anticipates an increase in GDP per capita next year, driven by a slowdown in population growth coupled with lower interest rates. Variable interest rates, which are influenced by the BoC's policy rate, will see immediate decreases, while fixed-rate mortgages will remain unaffected for now. Fixed rates are more closely tied to bond markets and various economic factors. Currently, fixed rates are lower than variable rates, but the gap is closing.

Single Family Homes Although sales have declined, the average price of a single family home in Kelowna has remained fairly steady at $1,093,541 for the month of September. It seems that the higher priced homes are sitting while the lower priced homes are selling. Currently we have 15 months of inventory in the single family market, leaning towards a heavy buyer’s market. Townhomes Townhomes have dipped in price. Currently the average price of a townhome in Kelowna is $654,593 - down 6.8% from last month and down 14.5% from the same month last year. Currently we have 10 months of inventory in the townhome market. Condos The average price of a condo in Kelowna currently sits at $455,710. We are seeing that the newer and higher priced condos are sitting on the market, however the moderately priced condos are selling. Notably, the new builds and concrete-built towers are not getting the price they’re asking as buyers are opting for older condos with more space and a lower cost per square foot. There is just 8 months of inventory in the condo market. Interest Rates The Bank of Canada rate was lowered to 4.25% - This is the third consecutive rate drop since June of this year, and more expected to come. The next interest rate announcement date is set at October 23, 2024 along with the BoC’s quarterly Monetary Policy Report. Although variable rates are dropping, they are still much higher than fixed rates, which is why we are not seeing an immediate uptick in the real estate market. The BoC rate affects the variable rate but does not directly change the fixed rates, which are more closely tied to bond markets and other economic factors. Consumer level variable rates are currently at around 6% while fixed term mortgages are in the mid-high 4% range.