October 2024 has been a standout month for Central Okanagan’s real estate market, showing impressive growth both month-over-month and year-over-year. Sales volume surged by 60% from September 2024 and also saw a 60.14% increase compared to October 2023. Similarly, the total units sold rose 42.97% from the previous month and 42.01% year-over-year. This simultaneous growth suggests a robust combination of seasonal and non-seasonal factors driving demand in Central Okanagan. Here’s a deep dive into the underlying drivers and what they signal for the market’s future.

‍

1. Interest Rate Cut to 3.75%

The recent reduction in interest rates to 3.75% has had a strong, dual impact, immediately boosting both month-over-month and year-over-year demand. Lower interest rates enhance buyers’ purchasing power, making homes more affordable and encouraging market entry.

• Month-Over-Month Impact: In October 2024, Central Okanagan saw 409 units sold, a 42.97% increase from 286 in September 2024 and 60% jump in sales volume. The rate cut made it easier for prospective buyers to finance larger loans, motivating them to act quickly and contributing to the sharp monthly gain.

• Year-Over-Year Increase: Compared to 288 units sold in October 2023, this October also showed a 42.01% increase in units sold and 60.14% jump in sales volume. This year-over-year growth points to a lasting effect of the rate cut, which is drawing back buyers who were previously priced out by higher interest rates.

‍

‍

Affordability Example: A $500,000 mortgage, now financed at 3.75%, saves buyers roughly $120 per month compared to a 4.25% rate. Over a 20-year loan, that’s a savings of nearly $30,000, which can make a difference in high-cost markets like Central Okanagan. The rate cut has particularly impacted high-value property sales, which, as we’ll see, is a key factor in the overall increase in sales volume.

‍

Buyer Profile Expansion: This rate cut has brought a broader spectrum of buyers into the market, from first-time buyers now able to stretch their budgets to investors pursuing high-value properties. This is reflected in the significant activity in the luxury segment, contributing substantially to October’s sales volume.

‍

2. Increased Inventory

A steady increase in inventory has also fueled the growth, giving buyers more options and creating conditions for sustained activity beyond seasonal interest. Central Okanagan’s active listings rose from 3,113 in October 2023 to 3,927 in October 2024—a 26.15% year-over-year increase.

• Month-Over-Month Stability: The active listings in October 2024 remained steady compared to September, providing a stable selection for buyers. This consistency allowed buyers to evaluate their options thoroughly, boosting confidence and leading to the 42.97% month-over-month increase in units sold.
• Year-Over-Year Growth: The broader inventory, up 26.15% year-over-year, allowed the market to cater to diverse buyer needs, from entry-level homes to high-end properties. This expanded choice likely contributed to the 42.01% year-over-year rise in units sold by making it easier for buyers to find properties that fit their criteria.

‍

Absorption Rate and Market Balance: October’s absorption rate stood at 10.42% (409 units sold out of 3,927 active listings), indicating a balanced market. This balance offers buyers a mix of choices while assuring sellers that demand is strong enough to prevent inventory from stalling.

‍

Broader Appeal: Increased inventory means that Central Okanagan can serve various buyer profiles, from first-time homebuyers to luxury investors. This diversity strengthens the market’s resilience, with options that align with different financial and lifestyle preferences.

‍

3. High-Value Property Sales

One of the primary contributors to October’s sales volume surge is the increase in high-value transactions. In Central Okanagan, residential properties reached an average price of $1,086,399 in October 2024. This growth in the luxury market significantly boosted total sales volume, resulting in $351.3 million in October, a 60.94% increase from $218.2 million in September and 60.14% more than the $219.4 million in October 2023.

• Month-Over-Month Luxury Demand: High-value properties saw notable activity in October, which helped drive the 60% increase in sales volume over September. Buyers took advantage of the rate cut to invest in premium properties, reflecting a shift toward upscale market segments.
• Year-Over-Year Luxury Growth: Compared to October 2023, the total sales volume increase of 60.14% underscores a stable demand for high-value properties over the past year. This trend indicates that Central Okanagan is becoming increasingly attractive for high-net-worth buyers and investors, who see value in the area’s luxury real estate.

‍

Breadth of Transactions: The market’s strength in October was evident across price points. While luxury properties contributed to sales volume, condos and townhouses, with average prices of $489,042 and $715,513 respectively, attracted local and out-of-town buyers alike. This broad-based demand across multiple property types contributed to both the month-over-month and year-over-year gains.

‍

4. Competitive List-to-Sell Ratios

The October 2024 list-to-sell ratio held steady at 96.36%, slightly above October 2023’s 95.56%. Properties are selling close to their asking prices, reflecting a balanced market where demand supports stable pricing.

• Month-Over-Month Market Speed: The average days to sell in October was 58 days, down from 66 days in September. This shorter timeline shows that buyers acted decisively, likely due to the interest rate cut and the seasonal push to close before winter.
• Year-Over-Year Market Stability: Compared to October 2023, the consistency in list-to-sell ratios indicates a market where buyers and sellers feel confident about pricing. This stability reassures buyers that they’re paying fair value, while sellers benefit from strong demand that leads to competitive offers close to their listing prices.

‍

Impact on Buyer and Seller Confidence: This balance makes Central Okanagan a compelling market for both parties. Buyers are encouraged by steady prices, and sellers are motivated to list, knowing that demand is high enough to support their pricing expectations.

‍

5. Amplified Seasonal Demand

October typically sees a little uptick in activity as buyers aim to finalize transactions before winter, but this year’s increase goes beyond usual seasonal trends. The alignment of economic factors like lower interest rates, stable inventory, and high-value property transactions created an ideal environment for accelerated growth.

• Month-Over-Month October Momentum: The 60% increase in sales volume and 42.97% rise in units sold from September are clear indicators of this amplified seasonal effect. Buyers and sellers both acted with urgency, capitalizing on favorable conditions before the expected winter slowdown.
• Year-Over-Year Continuity: The year-over-year growth of 60% in sales volume and 42% in units sold suggests that October’s spike is not just seasonal but reflects broader market appeal. This year-round interest shows that Central Okanagan is evolving into a market with consistent demand beyond typical seasonal patterns.

‍

Sustained Demand Potential: The October surge shows that the Central Okanagan market is resilient, with fundamentals that support both seasonal and year-round demand. This stability is likely to carry into the coming months, as buyers and investors look to lock in opportunities in a market that has proven its appeal.

‍

Conclusion

The October 2024 surge in Central Okanagan real estate is a powerful indicator of the market’s strength and resilience. With 60% increases in both month-over-month and year-over-year sales volume and 42% gains in units sold across both timeframes, it’s clear that Central Okanagan’s appeal is more than just seasonal.

‍

The recent interest rate cut to 3.75% has catalyzed demand, particularly in high-value segments, while increased inventory and steady list-to-sell ratios have created a balanced, buyer-friendly market. High-value transactions have further boosted sales volume, solidifying Central Okanagan’s position as an attractive option for investors and luxury buyers alike.

‍

Looking forward, Central Okanagan’s balanced demand, strong inventory, and competitive pricing make it a prime destination for buyers, sellers, and investors. As these trends continue, Central Okanagan is poised to maintain its momentum, offering robust opportunities in one of Canada’s most dynamic real estate markets.