|Daily Courier file photo|
New home construction and prices in Kelowna slumped in 2012, but will rebound this year, according to Canada Mortgage & Housing Corporation analyst Paul Fabri.
But the good news is both are expected to pick up in 2013.
Figures just released by the Canada Mortgage & Housing Corporation show in 2012 in Kelowna construction started on 836 homes of all kinds: single-family detached, duplex, townhouse, condominiums and apartments.
That's down from 934 starts in 2011 and a big drop from the boom-time record of 2,805 in 2007.
The average selling price of a new single family detached home in 2012 was $730,000, a bit of a drop from $734,100 in 2011.
"Housing starts are expected to pick up,
increasing to 1,150 homes in 2013," said Canada Mortgage & Housing Corporation
analyst Paul Fabri.
"Expect prices to edge higher, increasing two per cent in 2013 as demand improves and the supply of listings is drawn down. Stronger employment growth coupled with favourable interest rates will (also) support demand for housing in Kelowna in 2013."
New house prices are always substantially higher than the average selling price of a
resale single family detached home on the Multiple Listing Service (MLS), which in 2012 in Kelowna was $467,800.
The reasons being that new homes are, well, new and have all the latest materials, technologies and building techniques; they include a building lot that had to be hooked up to utilities and services; and buyers of new homes tend to have some more money for
extra space and upgrades.
"(However) demand for detached homes has shifted away from higher prices to less-costly homes," Fabri pointed out.
"Detached homes priced at less than $500,000 accounted for 36 per cent cent of
absorptions in 2011 compared to only 23 per cent in 2010."
The new home market was especially hard hit by the recession that started in late 2008.
The bottom dropped out of the vacation and second home market driven by Albertans and Vancouverites coming to the Okanagan to buy expensive resort housing.
Additionally, the boom prompted a lot of speculation building, especially condominiums, and that unsold inventory not only slowed future building for years, but led to price slashing.
Kelowna's most affordable new home neighbourhoods are downtown, Rutland, Westbank and Glenrosa.
Mid-priced areas include Peachland, Shannon Lake, North Glenmore, Glenmore, Lake Country and Black Mountain.
The most upscale single-family detached new home building is concentrated in the Upper and Lower Mission, Southeast Kelowna, Dilworth Mountain, North Glenmore, Lakeview Heights and West Kelowna.