The Krash?

Holy Okanagan! Wassup with Kelowna?

Regular addicts will recall the ‘One Day Only!’ sale of waterfront condos in that bucolic BC town last month. A fifth off the regular price.

As this blog reported: “Yesterday the Mission Group chopped its inflated price list because, “We’re listening to what the market needs today,” says owner Luke Turri. “We’re looking to meet the market where it is right now and be very transparent about that.”

And where is that market these days?

A hot mess. And it doesn’t stop with stalled condos. Or Kelowna. But this place is turning into the dystopian poster town of what happens when the thing you build a local economy on (real estate) goes paws-up.

The unemployment rate in K-town is an astonishing 11%. That exceeds the 8.4% level in the GTA, recently whacked by the Trumpian attack on the vital car business. It’s vastly higher than the 6.2% jobless level in the Lower Mainland, or the national average of 6.5% (which just tumbled).

This comes as the rental vacancy rate in Kelowna has also set a national record. A year ago it was a worrisome 3.8%. Now it’s at the official WTF level of 6.4%. That compares with an historically-high rate of 2.8% in Toronto and an equally unusual level of 3.7% in Vancouver – where record new supply and slagging demand are being cited.

Of Kelowna, CMHC says the current vacancy rate is unprecedented – just like the number of unemployed. And now, apparently, the out-migration. The latest forecasts of population growth have been slashed by forty thousand, a hefty and unexpected revision.

“Rental signs are popping up everywhere,” reports a local Blog Dog. “According to GlobalBC the reason is the loss of non-permanent residents – international students and temporary foreign workers – as well as an outflow of interprovincial migration, mostly to Alberta.” Living costs are too high, and new real estate keeps coming onstream. Landlords are desperately competing with tenants with free cable, free months of rent, free parking and decorating services.

But, alas, it’s not just this place. The interior BC city – famous for its own in-lake sea monster and sexy skiing – may presage the future of many Canadian communities as real estate sinks, population growth stalls out, affordability is ridiculous, supply overwhelms demand and we’re still governed by people who think we need more houses.

The latest national stats just arrived. Not good.

Real estate sales tumbled 11% last month. A grater decline ocurred in Vancouver and the GTA. The Canadian numbers are negative on a yearly and monthly basis, as that slow price melt we forecast here a couple of years ago continues. Listing levels have been fading for a few months as increased numbers of sellers give up – some waiting for a Spring uptick which may never come.

The Bank of Canada, as we all know, hit the wall. Last week it held rates steady and hinted broadly nobody should be expecting the cost of money to fall further. It’s a drum Bay Street economists have been beating, saying recent employment gains, massive federal government spending stimulus and stable inflation – plus the continued threat coming from America – mean Tiff & Co. are in turtle mode. As reported, there are rumblings the next rate change will be an increase.

And here are the new inflation stats. They confirm the central bank can afford to do squat. At 2.2% the cost-of-living increase is in the zone, unchanged in the past month and slightly below what most had expected. Yeah, grocery prices are up by twice that amount, but food is so overrated. Gas is cheaper, and so are hotel rooms in Toronto, now that Taylor Swift is gone. (Seriously. It’s a thing.)

Says BMO’s Doug Porter: “The calming core metrics would fit with the view that the BoC will be comfortable on the sidelines for some time yet.”

In short, no mortgage rate changes. No stimulus for the real estate market. No continued steady stream of new Canadians – permanent or temporary. And at the same time, a flood of new condo and purpose-built rental units coming to market from projects started three or four years ago, when we were young and naïve, hurtling into the gathering dawn of a post-Covid world.

Behold Kelowna. Coming to a town near you? Pray not.

About the picture: “Pretzel was our “oops” dog, arriving in our lives a little before COVID,” writes Jason. “We both worked from home, and he was always there—surrounded by his family, endlessly spoiled, and absolutely convinced he was human. His personality was immense. It filled every corner of our lives and made us laugh every single day.

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To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/12/15/the-krash/