The Okanagan real estate market showed signs of life in fall 2025, rebounding from last year’s subdued activity. In the third quarter of 2025, the region recorded 2,474 residential sales, totalling $1.9 billion in transaction volume. These figures represent a year-over-year increase of 18.7% in units sold and an 18.9% gain in dollar volume. However, despite these improvements, activity levels still align with those last seen in 2013, underlining how weak 2024’s market was. The current growth appears to be more of a recovery from that downturn than a full return to strength.
Economic Shifts and Market Readjustments
Market conditions are being influenced by several structural and economic shifts. Population growth has slowed due to changes in migration trends, adding to overall uncertainty. Meanwhile, the market is correcting from the dramatic pandemic-era surge, which was driven by ultra-low interest rates and intense buyer urgency. Now that those drivers have faded, home prices and activity are realigning to more sustainable levels .
Seller Hesitation and Pricing Challenges
Many property owners are still anchored to past peak prices and hesitant to align with current market realities. This mismatch leads to listings being overpriced, lingering on the market, and undergoing multiple reductions. Properties often sell for less than they would have if priced competitively from the start. Data indicates that every week a home sits on the market within the first 90 days can reduce the final sale-to-list ratio by about 1%. This emphasizes how crucial realistic pricing is in today’s environment.
Inventory saw its first year-over-year decline in nearly four years, with 6,407 active listings as of September 2025—a 2.5% drop from last year. The trend isn’t uniform across housing types: while single-family inventory fell sharply, condo inventory—particularly in Kelowna—increased, largely due to recently built units no longer viable as short-term rentals following new provincial restrictions .
Financial Pressures and Rate Changes
Higher mortgage payments, especially for homeowners renewing at today’s rates, are starting to put financial strain on some. This has led to a rise in foreclosures, though overall market health remains stable. According to CMHC data, mortgage delinquencies in Kelowna remain below 0.2%, significantly lower than in the early 2010s.
In response to economic softness, the Bank of Canada reduced its policy rate to 2.5% in September, citing labour market slack and negative Q2 GDP growth. Inflation has eased, leaving room for one more cut this year. However, unlike previous cycles, this rate drop is unlikely to stimulate housing activity significantly. Rising bond yields have already pushed fixed mortgage rates higher, reducing the effectiveness of the Bank’s easing policy for housing .
First-Time Buyers and Market Affordability Trends
Although prices have recently inched upward, they remain below 2022 highs. It’s worth remembering that real estate provides more than just investment value—it offers shelter, security, and long-term lifestyle benefits. As the market adjusts, younger households are finding more opportunities. The percentage of first-time homebuyers has reached its highest level since at least 2018, according to provincial data.
Affordability is gradually improving as new inventory emerges, especially from sellers under financial stress or downsizers aiming to exit before further declines. This trend is leading to a greater supply of entry-level and alternative housing types, making the market more accessible for families and new buyers .
Looking Ahead: A Seasonally Slower Market with Creative Solutions Emerging
Looking forward, ongoing economic headwinds combined with the seasonal slowdown are expected to keep activity subdued. Without new stimulus or policy support, a sharp rebound in sales is unlikely. Many transactions remain contingent on other sales (“subject to sale” offers), creating a domino effect that slows market momentum.
In response, more sellers may turn to creative strategies—such as seller take-back financing—to help deals move forward. Although listings briefly dipped, supply is expected to climb again through fall and winter, driven by financial pressure and strategic downsizing. While this could weigh on pricing further, it also supports a more balanced and affordable market in the long run.