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No land, little demand for new Penticton homes

It's been a while since Penticton residents saw anything like this. New homes have become a rarity in the city thanks to reduced demand and no space to build.
September 16, 2013 - 4:59 PM

PENTICTON - Location, location, location might be a good reminder for those looking to build a business or a home but in Penticton locations are hard to come by.

While Vancouver enjoyed a bump in single housing starts in the first quarter of 2013, up 144 homes from the same period last year, Penticton's first quarter results showed only eight new homes were built, three more than the same time period in 2012.

The differences between the two cities are more than just their populations, Canadian Mortgage Housing Corporation analyst Paul Fabri says. Penticton might be a gorgeous place to live with vineyards, wineries and mild weather acting like honey to all sorts of residents including high-end physicians, but what it doesn't have is space.

Penticton is tight for lots says Fabri. The community is boxed in by two lakes, steep valley slopes and land owned by several First Nation communities. There's almost nowhere flat to build on.

Before he gets into other reasons the market is slow Fabri cautions readers not to compare today's numbers with how the market was doing from 2000 to just before the U.S. housing bubble burst in 2008. That time period saw record sales and it was almost an anomaly.

He says there are several reasons the market has dropped off with the first being a reduction in demand for high-end resort homes and second residences. The Okanagan Valley also does not have a resource based economy which encourages out-of-towners to come work and live. "We don't have lots of mines here."

People are also looking for existing homes which tend to cost less than houses built from scratch. Existing homes sales are up this year in Penticton, Osoyoos and Oliver.

And a big reason no one is buying homes in the Okanagan Valley was due to the U.S. housing crisis in 2008. Residents unable to pay their mortgages and other bills left thousands of homes vacant to be sold at low prices. Instead of Americans coming north or Canadians staying put, many are buying just-vacated houses across the U.S.

To contact a reporter for this story, to send photos or videos, email Shannon Quesnel at squesnel@infotelnews.ca, call 250-488-3065 or tweet @shannonquesnel1

News from © InfoTel News Ltd, 2013
InfoTel News Ltd

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