A booming commercial and development real estate market in Kelowna shows no signs of slowing down, says a local business and investment broker.
Terse Cairns of Faith Wilson – Christie’s International Real Estate describes the Kelowna market as “very dynamic and extremely competitive,” with investors hailing from across Canada and Europe.
“The demand for investment in Kelowna is growing because it is increasingly seen as a great place to live and small investors who manage their own portfolios like to be close to where they invest their money. So they are moving here and looking to buy commercial property at the same time,” Cairns said.
Cairns said that among large pension fund and wealth management investors, Kelowna has traditionally been considered a secondary market next to Vancouver, Edmonton, Calgary or Toronto, but our status has been enhanced by population growth and potential commercial that it brings.
She says that’s reflected in her own company’s decision to open a brokerage office in downtown Kelowna next month.
“Since COVID, there is a lot more competition in the market. I have a smaller investor client for whom I have written double digit offers on properties. I guess we’ve submitted about 10-12 bids now and we’ve consistently outbid each time despite the fact that in many cases we’ve offered the asking price,” Cairns said.
“It’s very difficult for me to advise someone and suggest that they outbid when the value of the property doesn’t justify it, but it just shows that the competition has become very, very fierce.”
According to Cairns, what is creating the buzz for investment properties is the active global promotion of the Okanagan lifestyle over the past 15 to 20 years, the affordability of property compared to major urban centers and the temperate climate.
While home prices have soared post-COVID, often making buying residential property out of financial reach for local residents, Cairns says the measure of affordability is different for people selling their most large properties in the inner city and moving to the Okanagan.
“And there is an opportunity here. Kelowna is still seen as an emerging city where it’s an opportunity for entrepreneurs to come here and open businesses that we haven’t had access to yet.
She said this opportunity is reflected in the growth of the food and beverage industry and the growing cottage industry of craft breweries, wineries and distilleries.
“Things like that are starting to show up and it’s helping to make Kelowna a much more vibrant city now,” she said.
“It’s not so much if people come, businesses will follow. These people bring businesses with them…help the economy grow here.
And with the wealth coming to Kelowna, she expects to see more luxury brand retailers show up here.
“I think that’s something to keep an eye on because right now shopping for any luxury brand is either done online or while traveling to Calgary or Vancouver. But I think as the city grows, the demand for high-end luxury goods will increase with it.
Sustaining growth, she says, will continue to be driven by population growth and the perceived value of return on investment.
“It is definitely going to be sustainable because there are a lot of people who want to come here and a lot more people who stay here. In 2021, we had two million people overnight in Kelowna, and that was a 20% increase from the previous year, which bodes well for the hospitality industry which has been hit hard by the COVID.
“Things have slowed down a bit on the residential side, with sales down 35% in the last month, but that’s because of rising interest rates and people being a little more cautious, a bit more wait and see rather than jumping to all the available options.
“But for the demand for commercial properties, it will remain strong and there will certainly be more interest in this market than ever before.”
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Commercial Real EstateKelowna