Housing boom not over
Photo: Wayne Moore
A Kelowna realtor says the city is still in the “early to mid stages” of a real estate boom.
AJ Hazzi, the founder of Vantage West Realty, made the prediction at a Kelowna Chamber of Commerce luncheon Feb. 8.
Citing statistics from his firm’s “constant” tracking efforts Hazzi said strong inward migration, a “crazy” construction market and very healthy first-time buyers market are all signals of “early stage growth” in Kelowna.
“My prediction is that this market has plenty of runway in it still. I see things being very strong all the way through 2017 and into 2018,” Hazzi told the crowd.
He admitted many people will automatically think “bubble” when he says “boom,” but said Kelowna’s real estate market is significantly different today than it was in 2007 when the bubble actually did burst hard.
For one, he said, there is much less speculation going on.
In 2007 there was five times more deals happening “on spec” (properties that were bought and sold within a year) than there are today. Now, people aren’t really buying up batches of units without any intent to live in them, or buying properties to “flip” like they were ten years ago.
Hazzi also pointed out that there is very little foreign investment in Kelowna’s market, with foreign buyers representing less than two per cent of real estate sales.
“That could all but shut off and it doesn’t affect what we’re doing,” he said.
Finally, lending requirements today are much more stringent than they were ten years ago. “Ninja mortgages” given to people with no jobs and no assets are a thing of the past, and “you need to give up your first-born kid to get financing,” Hazzi said.
Tougher financing rules, he said, will create a “soft landing” for the market once it finally enters its inevitable “slump period.
The beginning of that slump, Hazzi said, can be very subtle, and easy to miss “if we all drink too much of our own Kool-Aid.”
He warned people in the business to watch for “serious overbuilding,” rising vacancy rates, falling rental rates and a change in market temperament from “greed” to “fear.”
“Once you accept that it’s a foregone conclusion that things are about to chance, you can take some proactive steps’ in your own life to prepare, Hazzi said.
All Biz Releases Stories
