Local Community Advertising
Kelowna and the rest of B.C. is seeing significant growth in the labour market this year - enough growth to trigger a recession, according to chief economist for Central 1 Credit Union, Helmut Pastrisk.
Pastrisk, spoke on Friday at the Kelowna Chamber of Commerce and said he expects to see B.C.'s MLS residential housing sales fall 4% in 2018 and 1% in 2019.
He contributes the potential decline to this year's growth in the labour market, which he adds is the best single economic indicator for a region.
According to Pastrick in 2017, the labour market throughout the Central Okanagan grew significantly.
While B.C.'s rate of employment was up as a whole by 4%, Kelowna's rate of employment grew by 10%.
The majority of Kelowna's growth was seen in full time jobs in a broad range of industries including, construction, finance, real estate, food, government services, and manufacturing.
With the growth in jobs and a strong economy, people were buying more homes, which increased the value of homes.
B.C.’s median home value climbed seven per cent this year to $500,000, following an eight per cent increase in 2016.
In the Okanagan, MLS residential sales peaked in early 2016 and the pattern was consistent for most markets across B.C.
But because of this growth, Pastrick anticipates a negative number next year in the labour force and housing market, simply because the increase was so significant.
Over the next two years, rising mortgage rates and high prices will curtail sales and he expects the real estate market to cool significantly.
Local Community Advertising