KELOWNA, B.C. – June 5, 2018. The volume of May home sales across the region of Revelstoke to
Peachland contrasted sharply with this time last year, with 817 homes sold, a slight uptick from April but
down 28% over this time last year, reports the Okanagan Mainline Real Estate Board (OMREB).
“Not surprisingly, the residential home market continues to slow after a particularly heady market that
peaked in 2016. Supply is starting to catch up with new units coming on stream, while demand is
dampening as a result of government regulations,” said OMREB President Marv Beer noting that May is
the third consecutive month where sales volumes were down from the same period last year.
New listings were 1764, up 16% over April and 7% over this time last year. Average price, typically the
last indicator to normalize, was $532,972, just 1% over April and 4% over this time last year.
“Market peaks and valleys could be significantly softened if government were to address the root cause
of BC’s continued chronic shortage of affordable housing,” Beer contends.
“When demand for housing increases, home builders typically respond by building new homes,” Beer
notes. “But, as we’ve seen here and across BC in general, prices increase when supply doesn’t ramp up
fast enough, making homes less affordable in general.”
Adequate housing supply is critical for long-term generalized housing affordability. Rather than targeting
specific groups, government could make a lasting, more significant impact on housing affordability by
addressing the regulatory hurdles that constrain housing supply in general. This, in turn, would impact a
much larger population of renters and buyers who would not qualify for social housing. In fact, a new
UBC study concerning Metro Vancouver provides evidence that the focus governments have placed on
demand-side policies are unlikely to lead to housing affordability. The concepts are applicable
elsewhere. Current regulatory barriers, or ‘red tape’ coupled with an uncertain regulatory environment, aggravates
supply of housing now and likely critically affects overall affordability in future.
“The problem with trying to curb demand is that it is unlikely to free up the kind of housing people want
and need, plus it’s risky, with the potential for broad-reaching economic and development implications,”
says Beer. According to Beer, the situation is made even more worrisome when federal and provincial
governments are both tinkering in the market independent of each other.
“As governments continue to tinker, rather than deal with the root cause of BC’s real estate market
woes, they are very likely to harm the very people they aim to protect and support,” concludes Beer.