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Is anyone buying the new shiny Kelowna condos? Actually, they already did

The two towers of One Water Street appear in this 2021 photo.
The two towers of One Water Street appear in this 2021 photo.

If you hadn't stepped foot in Kelowna for five years, you'd likely be amazed at the number of glass towers now dotting the city's skyline.

So far this year, 740 brand-new condo units have come onto the real estate market, more than twice the amount of last year, and a stark contrast to 2021, when not a single new condo went on the market.

In the last three years, Kelowna has seen more than 1,200 brand-new condo units built.

But as condo sales in the Central Okanagan are more than 20% behind the ten-year average, is anyone actually buying them?

"It's an excellent time to buy," Royal LePage Kelowna realtor Don Rae told iNFOnews.ca. "As a realtor, we always say that. But it truly is, because there's a lot of competition."

And there's a lot of condos for sale.

Numbers from the Association of Interior Realtors show that there were 958 condos on the market in July, 25% more than a year earlier and almost double from August 2023, when about 500 units were on the market.

"The higher end of the condo market is selling, typically to down-sizers, but the entry-level side of it is... struggling," Rae said.

As first-time buyers are more affected by jobs, the economy, tariffs and the cost of living, there are more variables working against them than a cash buyer looking to downsize.

Rae said the sheer number of condos on the market has also made buyers standoffish. They're happy to wait and see what comes on the market, and give it more time.

After almost 25 years as a Kelowna realtor, Mark Walker is seeing much the same thing.

"I feel like that urgency is just not there. They're doing it on their time," Walker said. "A lot of my clients over the last two, three years have just been cash buyers that are finding the perfect home. And they're they're waiting. There's not a rush."

So if no one's really buying, will the shiny new glass towers sit empty?

Taylor Musseau is a partner and managing director at MLA Okanagan, a real estate marketing and sales company that markets and sells condos before buildings have even been built.

Musseau said that before a condo building can get shovels in the ground, it typically has to sell between 65% and 75% of the units. Developers typically have a year to secure that many sales, and if they fail to meet it, the deposits put down by buyers get returned.

So the towers that you see around Kelowna are already largely sold, but new projects aren't getting off the ground.

"There's a lot of hesitation and fear from developers to bring new products to market because we're at a glut of it right now. It's very, very slow transaction volume," Musseau said. "It's happening all over BC."

According to the Canada Mortgage and Housing Corporation in 2024, in Vancouver, 10 times as many condo development projects were canned because developers could not get enough pre-sales compared to 2022.

Musseau said some developers will instead pivot and go into the rental market.

The developer of the eye-catching 42-storey Water Street by the Park tower, Orchard Park Properties, says both its towers are 80% sold, and Mission Group says the 300-plus unit Aqua Waterfront Village is 77% sold out.

But Walker says he's getting weekly calls from out-of-town investors who put down deposits on the condos a few years ago, when the market was quite different.

"They either don't want to keep them to rent them, or in some cases, they don't even have enough money to close," Walker said. "One guy, he bought two condos and yeah, he said he can't get a mortgage to close on it."

Musseau said she will always strongly discourage buyers from trying to flip a condo before completion. Buyers stand to lose their 20% deposit and risk being sued by the developer for damages.

With rent likely not covering monthly mortgage payments, and prospective buyers turned off by apartments with long-term tenants, it may leave condos sold but empty.

A rendering of the Aqua development.
A rendering of the Aqua development.
Image Credit: https://www.missiongroup.ca/

Not all condo buildings are created equally, and many were pitched and zoned for short-term rentals. The buildings featured pools and more amenities along with steep strata fees to cover the cost.

When the BC government barred short-term rentals in May 2024, it left many who'd purchased condos specifically to Airbnb wondering what to do.

While iNFOnews.ca couldn't verify the story, one realtor spoke of a friend renting in a building designed for short-term rentals. The corridors were quiet and they always got the pool all to themselves.

Rae said many who bought those condos were just mom and pop investors, not large businesses buying dozens.

Musseau said it put a lot of people in a bad position.

"They're trying to sell it and dump it and just take a loss, or they put a tenant in and take a monthly loss," she said.

She also has personal experience.

"I bought two myself," she said.

She decided to live in one and rent the other out long term. She's taking a loss but playing the long game with her investment.

The short-term rental ban also affected university students, with many landlords renting to students during school time and putting the unit on Airbnb in the summer. Now they want students to rent all year long.

With so many condos on the market, prices would be expected to fall, but somehow prices remain steady with the benchmark price hovering at about $500,000.

"Everybody thinks that the condo prices are all just going to fall and ... you're going to have this ability to pick up a unit for dirt cheap because the market is going to crash out," Musseau said. "I just don't see it happening."

If people can afford their mortgages and can live for a few years taking a monthly loss, providing the bank doesn't foreclose on them, they're likely to just keep ticking over.

With investors and first-time buyers checking out, Rae says it is a good time to buy.

"There's a lot of negotiating room. There are a lot of people that want to sell. And as a seller, you have to have the best product at the best price," he said.


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