From millionaire “dragons” to cash-conscious milliennials, Kelowna and the Okanagan are proving a tempting destination this year.
Kemp Edmonds and his wife were both born and raised in Vancouver.
But they won’t be raising their own child anywhere in the Lower Mainland.
“We started to look for a home in Kelowna and, to our amazement, a house by the lake cost virtually the same as a two-bedroom, one-bathroom condo in East Vancouver,” Edmonds, 34, said. “So we made the change.”
Real estate statistics show there is a growing trend of Vancouver residents moving to Kelowna, a city of just under 200,000 five hours east of Vancouver.
In January 2016, buyers from the Lower Mainland overtook purchasers from Alberta, reversing a previous trend for out-of-region homebuyers, said Corie Griffiths, manager of the Central Okanagan Economic Development Commission.
Buyers from the Lower Mainland now represent between 11 per cent and 15 per cent of purchasers, while the proportion of Albertan buyers has dropped to about 7 per cent from the previous range of 15 per cent to 18 per cent, depending on the community.
Two primary markets are driving the increase, Griffiths said: older families whose children are often still in school who have reaped the windfall of rapid real estate gains in Vancouver, and younger professionals who are moving to Kelowna for a combination of work, cheaper housing and lifestyle reasons.
In the first half of 2016, residential prices in the Central Okanagan jumped 12 per cent from a year earlier, to $456,000, according to the Okanagan Mainline Real Estate Board. The increase trails the 20 per cent rise in Greater Vancouver home prices, to nearly $1.1 million.
School enrolment numbers for Vancouver continue to decline, but in Kelowna, the number of students enrolled in kindergarten through high school began to increase in 2014.
Edmonds’ journey from Vancouver started when he accepted his “dream job” as a marketing director with FreshGrade, a tech startup based in Kelowna. His original plan was to fly back and forth between Vancouver and Kelowna. With a baby on the way, he and his wife were looking for a three-bedroom condo or townhouse in Vancouver, but they quickly hit their price ceiling.
“You start to reach up to $700,000, $800,000,” Edmonds said, “I presented the option that we could move to Kelowna.”
Robyn Setter, human resources co-ordinator for Bardel Entertainment, an animation company with offices in Vancouver and Kelowna, jumped at the chance to relocate to the Okanagan and get back to a slower pace of life.
Housing costs are much lower – the 28-year-old lives with her boyfriend in a two-bedroom garden suite she describes as “cheaper than Vancouver and more than twice the space,” including access to a yard. Part of her job now involves helping other employees relocate, and six people have joined the Kelowna office since Setter moved there in February.
But even as some make the move, technology and animation companies are still urgently seeking workers to relocate to the Okanagan.
Bardel wants to expand its Kelowna workforce from 50 to 120, Grieve said. The company plans to collaborate more with post-secondary animation programs in Kelowna and is considering opening its own school in the Okanagan’s biggest city.
Enter the dragon
Jim Treliving, best known as a panelist on the hit TV show Dragons’ Den, is among the entrepreneurs feasting on the suddenly hot Okanagan real estate market.
Treliving has found success with the Naramata Benchlands, a residential community being developed in the South Okanagan by Naramata Benchlands Properties.
The company is a partnership between T&M Management Services Ltd., owned by Treliving and long time Boston Pizza partner George Melville, and Lajora Holdings. The community’s first phase is 90 per cent sold out.
Housing sales in the Okanagan are soaring, with 1,200 units selling in May 2016, up 35.5 per cent from the same month last year, according to the Okanagan Mainline Real Estate Board.
The Naramata community is preparing to launch its second phase of 42 home sites in the fall, while only five home sites remain in the first phase. Prices for the buildin sites start at $189,000.
“It really is a piece of paradise [yet] with all the conveniences of living close to Penticton,” said Treliving.
Vancouver’s Macdonald Development Corp. successfully launched Lakestone, an upscale community with an extensive clubhouse on 550 acres skirting Okanagan Lake between Kelowna and Vernon, two years ago. Lots range from $190,000 to $450,000 and detached houses from $865,000, with duplexes under $600,000.
Kelowna growth
This July, Kerkoff Construction of Chilliwack took over the former Lucuya high rise condo site that has sat vacant in downtown Kelowna for eight years.
Kerkoff has renamed it 1151 Sunset Drive and is proceeding with a residential developnent of 117 condominiums, with seven townhomes skirting the 21-storey tower. Prices have not been released.
“We have heard from many Kelowna residents that they are happy to finally see construction taking place, as they have been patiently waiting for progress at the site for a number of years,” said developer Leonard Kerkhoff.
But the Okanagan offers more than real estate value, noted the Central Okanagan Economic Development Commission.
It reports that, in the downtown Kelowna area, Interior Health is completing a $400 million, five-storey headquarters for its 800 employees; Kelowna RCMP is moving into a new $48 million headquarters; and construction has started on a $65 million boutique hotel and conference centre. As well, the $35 million Okanagan Centre for Innovation, supporting high-tech businesses and startups, opens downtown this year.
Elsewhere in the region, construction is expected to start this year and continue through 2019 on Penticton Regional Hospital’s $325 million expansion.
In Oliver, construction is expected to wrap up this year on the $200 million high-security Okanagan Correctional Centre.
In the North Okanagan, Vernon is attracting a large amount of new investment. Commercial building permits spiked to $40 million in 2015, up from $8 million a year earlier. Projects proceeding this year in the city of 36,000 include a $23 million BC Hydro building, $6 million in other office and retail centres and more than $40 million in multi-family developments. •
