As we know already, Andrew Gaucher has plenty of street cred when it comes to his place in the Kelowna real estate market. He is the founder and president of Catalyst Land Development and general manager of G Group Land Development, and somehow manages to find time to serve as the vice-president of the McKinley Beach community.
We also know that he constantly monitors the market, assesses its trends, and makes strong, data-driven assertions about where these markets will go. Last summer when he sat down with addy to share some of these predictions about where the market was headed. Now we’re revisiting those assessments to see if they came to fruition, and what the next trends will be.
2019 Prediction: “a pickup to the market in the second half of [2019] or in Q2 of next year”
Result: “The second half of this year has been stronger than the first,” Gaucher says. The trend has been seen all across Canada, possibly as a ripple effect from national elections, and more people are beginning to look at Kelowna as an investment possibility.
“With a significant life purchase like real estate, people want something big they can tie their decision to,” Gauher says. “Something like an election. Political implications can heavily sway this in both Canada and the States.” He says investors keep a close eye on political happenings and want to know the good and the bad before pouring their money into a new investment.
2019 Prediction: Kelowna is likely going to see a longer than normal expansion period.
Although the first half of 2019 certainly saw a contraction period, Gaucher argues that the back half of 2019 started to see the beginning signs of expansion. He’s also confident that the expansion will continue to grow well into 2020, and maybe even 2010, thanks to the imminent signing of the USMCA and a China-United States trade deal. In addition to the trade deal and United States–Mexico–Canada Agreement, Andrew is also keeping a close eye on four key factors that will determine the momentum of this expansion period:
- Political interference, both positive and negative. National political promises, should they come to fruition, could stimulate the market. However, as the market rebounds, there is always the chance that politicians will step in with additional changes in an effort to prevent an over expansion or excessive price inflation..
- Economic realities. “Statistically, Canada and the US are due for a plateau or recession any time,” Gaucher says. History predicts it will happen, but it’s impossible to say when, or if, it will actually occur. “Trump will do what he can to keep the stimulus going before the election,” he says. If the US avoids recession, Canada will follow suit, which could expansion into 2021 or later.
- Negative announcement by Tolko. This lumber company, which employs approximately 200 workers locally, is closing all of its British Columbia locations. Kelowna could suffer by losing those jobs, but on the other hand, the move means a large parcel of over 40 acres will open up downtown, and new, exciting development could take place there. This could mean a significant boom as the site is redeveloped into a higher density, mixed-use property. It could take five to ten years, but it could be a huge boon to continued downtown revitalization.
- Moderation in the immediate condo demand. Right now, new condo developments in Kelowna are 80 to 90 percent sold before construction is even complete. “It’s not sold out, though,” Gaucher says. “There are still other condo developments coming.” In the next one to three years, he anticipates that the demand for condos will become more moderate as all in construction inventory is completed and moves into the market.
Looking Forward to 2020
“Either way, historically speaking, the market should strengthen [again] in the next 12 months at the latest,” he says. Confidence is high right now among investors and developers, he says, which means new projects and higher price points are coming into the market.
“We’re seeing the most in-demand housing markets in the $600, to $800,000 range and another bump in the $1 million to $2 million range; this increases investor confidence,” he says. “Urban revitalization and the higher end in the luxury market are quite robust right now. There’s also a lot of new market housing being developed for the entry-level or government-subsidized segment.” This flux will add fuel to the investing fire in the coming months.
Considering recent conditions at the national and international levels, Gaucher predicts that markets will pick up at a reasonable pace, with residential values rising perhaps three to eight percent in 2020. All in all, it’s continuing to look like a robust market, and Kelowna continues to be a wise place to invest when it comes to the historically safe real estate market.
Invest wisely:
