The Kootenay economy has posted a strong performance in recent years. Employment increased 11 per cent in 2007, and the unemployment rate is at its lowest in more than a decade. The labour force participation rate increased from 59 per cent in 1997 to 67 per cent last year. Robust employment growth is expected to continue in construction, agriculture and metals manufacturing, as well as accommodation and food services, retail and wholesale trade and high technology. Strong labour market conditions are underpinning local housing demand.
The Kootenay real estate market also benefits from homebuyers originating from outside the region, particularly Alberta. With Calgary’s economy falling from its lofty heights and its housing market firmly in buyers’ market conditions, reduced demand from Alberta buyers will impact Kootenay home sales in 2008 and 2009.
MLS® residential sales climbed 22 per cent to 3,476 units last year, the highest level ever recorded. The combination of eroding affordability and reduced demand from Alberta buyers will contribute to a decline in home sales this year. A total of 3,080 homes are forecast to trade hands in 2008, a decline of 11 per cent. This level of activity is expected to continue through 2009, though home sales will edge down 2 per cent to 3,020 units.
Kootenay home prices posted the largest year-over-year gains in the province in 2007. The average price of a home climbed 30 per cent to $272,138. Home prices are forecast to rise a further 13 per cent to $308,000 this year and 6 per cent to $327,000 in 2009. The Kootenays have not experienced a sizable increase in active listings like other BC markets; however, reduced demand is expected to sustain balanced market conditions this year.
Housing starts in the Cranbook CA are forecast to remain at nearly 195 units per year over the forecast horizon. Nearly 90 per cent of housing starts in the Cranbrook CA are single detached homes, though a marked increase in condominium development is expected over the medium term.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
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