Kelowna enters a new price bracket for 'luxury' homes
Real estate giant Re/Max recently published its 2022 Luxury Market Report where it listed the number of homes sold in 17 Canadian cities for more than $1 million last year.
But Taylor McFadyen, a Kelowna-based residential and commercial realtor with newly-expanded Faith Wilson/Christie's International Real Estate, pegs that luxury point much higher for Kelowna.
“What we’re seeing now is, the luxury category is closer to $2.5 to $3 million,” he told iNFOnews.ca. “Those are properties with views, exquisite finishes, privacy. We’re beyond that $2 million price point for that.”
A lot of homes for sale in Kelowna are priced in the $1.8-$2.2 million range, he noted.
“There are nice houses up towards Black Mountain,” McFadyen gave as an example. “Everything up there is selling for $1.6 to $1.7 million and you’re right on your neighbour’s house and you’re 20 minutes out of town, That’s not luxury. They’re nice houses, but you’ve got to spend more and you’ve got to be in different neighbourhoods to really get that exquisite, luxury, privacy, exclusive feeling.”
The Re/Max list puts Vancouver and Toronto in a separate category, including only homes selling for more than $3 million in those markets.
READ MORE: Kelowna house prices are now what Vancouver's were just 12 years ago
When it comes to the rest, Kelowna came in fourth, selling 1,475 homes for more than $1 million last year, a 114.7% increase over 2020.
Victoria was on top with 2,937 sold but the Kelowna market outsold some bigger cities like Calgary, Edmonton, London and Kitchener-Waterloo.
There’s a good reason for that.
“COVID really peaked the movement of people here with people coming from Vancouver, from Calgary, from Montreal, from Toronto – out of the big cities because they can work from home so why not be in an area where you’re close to the lake or close to the ski hills, close to the wineries and the golf courses?” McFadyen said.
He moved here from Ontario in August to expand Christie's’ presence in the Okanagan but is facing the same challenge all realtors are facing these days – a shortage of willing sellers.
“There’s certainly a shortage on all fronts right now, luxury and single family,” McFadyen said. “The luxury homes tend to take longer to sell because you’ve got a smaller buyer pool but, on the whole, there is still quite a lack of listings. I have a number of people looking right now and I can’t find one that kind of checks their boxes.”
Rising interest rates may dampen the buying frenzy that was a big part of the COVID-inspired hot market last year, but that’s not likely to deter the kind of buyers McFadyen deals with.
“A lot of people purchasing in that category are not getting mortgages,” he said. “A lot of the time they’re cash purchases or they’ve got other areas to obtain money from, whether that be internally through the family or through a business.”
In fact, the higher rates may be enticing some sellers to list their homes now rather than wait for the market to soften in the coming months.
Spring is the time of year when the real estate market picks up as people return from winter vacations in warmer climates. The easing of COVID restrictions also means more people are willing to have people view their homes so McFadyen is expecting the number of luxury listings to pick up.
“In the general market, I think we’ll see a little bit of a slowdown,” he said. “What does that mean in the Okanagan? That might mean, not six, seven, eight, ten offers on every property in a couple days' span. You might get a few offers on the property and, maybe, the price will shift closer to the asking price as opposed to $100,000 over the asking price as we’ve been seeing frequently.”
That’s not the same thing that’s happening in the luxury market. There tends not to be bidding wars for houses selling for more than $1 million anyways, he said.
With Kelowna being such draw, the real problem is more likely to be a shortage of homes in the $2.5 million plus category.
READ MORE: Kelowna not keeping up with demand for high-end penthouse condos
- This story was updated at 11:25 a.m., April 13, 2022 to correct the spelling of Taylor McFadyen's name.
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