A thriving commercial and development real estate market in Kelowna shows no signs of abating, says a local commercial and investment broker.
Terese Cairns, with Faith Wilson – Christie’s International Real Estate, describes the Kelowna marketplace as “very buoyant and extremely competitive,” with investors being drawn here from across Canada and Europe.
“Demand to invest in Kelowna is growing because it is increasingly seen as a desirable place to live and smaller investors who manage their own portfolios like to be close to where they invest their money. So they move here and at the same time look to purchase commercial property,” Cairns said.
Cairns said among larger pension and wealth management funds investors, Kelowna was traditionally seen as a secondary market next to Vancouver, Edmonton, Calgary or Toronto, but our status has been upgraded by the population growth and business potential that brings.
She says that is reflected by her own company deciding to open a brokerage office in downtown Kelowna next month.
“Since COVID, there is much more competition in the marketplace. I have a smaller investor client for who I have written up double-digit bids on properties. I would guess we’ve submitted about 10 to 12 offers now and we were consistently outbid every time despite in many cases bidding the asking price,” Cairns said.
“It is very difficult for me to counsel someone and suggest they overbid when the property value does not justify it, but it just shows the competition has become very, very fierce.”
What is creating the investment property buzz, Cairns believes, is the active global promotion of the Okanagan lifestyle over the last 15 to 20 years, the property affordability compared to larger urban centres and the moderate climate.
While residential prices have spiked post-COVID often making buying residential property out of reach financially for local residents, Cairns says the measure of affordability is different for people selling their larger urban centre properties and moving to the Okanagan.
“And there is an opportunity here. Kelowna is still seen as an emerging city where this is an opportunity for entrepreneurs to come here and open businesses that we have not had access to as of yet.”
She said that opportunity is reflected in the growth of the food and beverage industry, and the growing cottage industry of craft beer breweries, wineries and distilleries.
“Things like that begin to pop up and it helps make Kelowna a much more vibrant city now,” she said.
“It is not so much if the people come, businesses will follow. Those people are bringing businesses with them…helping to make the economy thrive here.”
And with the wealth coming to Kelowna, she expects to see more luxury brand retailers showing up here.
“I think that is something to keep an eye on because right now shopping for anything luxury brand is either done online or travelling to Calgary or Vancouver. But I think as the city grows the demand for high-end luxury products is going to grow with it.”
Sustaining growth, she says, will continue to be dictated by population growth and the perceived value return for an investment dollar.
“It is definitely going to be sustainable because there are a lot of people wanting to come here and a lot more people staying here. In 2021 we had two million people overnight in Kelowna, and that was up 20 per cent from the year before, which bodes well for the hospitality sector which was really hit hard by COVID.
“Things have slowed down a bit on the residential side, with sales down 35 per cent in the last month, but that is because of rising interest rates and people being a little more cautious, a bit more wait and see rather than jumping around at every option available.
“But for commercial property demand, it will stay strong and there will definitely be more interest shown in this market than ever has been historically.”
Want to support local journalism? Make a donation here.