Looking out across Kelowna's housing landscape, it's hard to spot the hopeful glimmers many have been longing for.
Unfortunately, the report by the Canadian Mortgage and Housing Corporation (CMHC) last week didn’t offer much positive news.
"Truthfully, the housing affordability problem appears to be worsening, not improving," expressed Bob Dugan, the chief economist at Canada Mortgage and Housing Corporation (CMHC), in his recent chat with The Canadian Press.
Kelowna's housing market, mirroring the wider trends of BC, is not immune to the escalating affordability crisis. In fact, the city has been experiencing some of the most rapid increases in housing prices in the province.
In Kelowna, the surging housing prices have outpaced even the provincial increases.
At $1,051,100, Kelowna’s average single family home price now considerably surpasses BC's average, which itself is higher than the national average of $729,044.
Kelowna continues to be the fourth most expensive housing market in Canada behind Vancouver, Toronto and Victoria.
This surge has been driven by a combination of factors including rising demand and constrained supply.
One of the major challenges Kelowna faces is the pressing shortage of available housing units.
A booming tech sector, combined with the city's appeal as a retirement destination, has significantly increased demand. However, housing development has not kept pace, resulting in upward pressure on prices. This is further exacerbated by geographical constraints.
This isn't due to a lack of interest in building or demand for housing, but rather, it's a consequence of labour shortages, escalating interest rates and material costs, zoning disputes, long zoning timelines, and the dreaded NIMBY (Not In My Backyard) syndrome.
This means that we will have less housing for the people that are desperately looking for it.
Most thought that with the rise in interest rates, housing prices would come down.
That happened for a short time, but seems to have stopped, as the BC Real Estate Association just released the latest data. These latest figure show that the prices are almost returning to previous levels.
Housing starts - a yardstick of new residential construction and a telltale sign of how Canada is addressing housing supply gaps - dipped 23% in May compared to April. This drop, mainly in apartments, condos, and other multi-unit housing projects, happened in Vancouver,
Toronto, and Montreal.
CMHC now predicts that we'll see between 210,000 and 220,000 new constructions this year in all of Canada. BC is predicted to emulate that decrease in housing starts.
But there is hope.
CMHC doesn't deem the affordability conundrum unsolvable. It believes that with collective effort, we can turn things around.
For example, CMHC rental incentives have resulted in about 24,000 rental units in BC in the last few years – double the housing than created by the NDP’s BC Housing.
The BC NDP government would love to take credit for this CMHC program that provides incentives developers to build purpose-built rentals in their own housing statistics, but this would be an obvious error.
In addition to increasing supply, there's a need to revise our perceptions of success.
We have to normalize different modes of housing, and get more creative with our zoning bylaws. We need to be able to accommodate families and visitors comfortably.
While the road ahead looks tough, crises often lead to new ways of thinking and doing things. I'm hopeful we'll find solutions to build more efficiently.
My question to you this week is in two parts: How does the rising cost of housing affect your family and what solutions to this pressing problem do you see?
I love hearing from you and read every email.
Email me at Renee.Merrifield.MLA@leg.bc.ca or call the office at 250-712-3620.