Kamloops real estate market enters 2024 with cooling activity, potential for interest rate cuts

KAMLOOPS — Real estate activity in the Kamloops area cooled off last year, thanks to a blend of factors, including high interest rates, wildfires and low housing supply.

Kamloops finished off 2023 with fewer home sales than average. According to latest figures from the Association of Interior Realtors, December saw 87 units sold, which is a 6.5 per cent decrease compared to the same month in 2022.

Given the interest rate changes seen throughout 2022 and 2023, it also wasn’t a surprise.

“What people also need to understand is a lack or decrease in sales and demand, are two different things,” explains Chelsea Mann, the president of the Association of Interior Realtors. “The demand is there, it’s just that a lot of people have been sidelined because of the interest rates or they’re just not feeling as confident and sitting back and waiting to see what was going to happen.”

Even though there was a decrease in sales, demand for homes is still high. Mann adds that the category of homes people are buying in Kamloops is continuing to expand out from the traditional single-family, stand-alone house.

“With the prices remaining high, the appetite for the townhouse market and things like that has increased somewhat just because people are capped, but they still want to buy a home,” added Mann.

Housing supply in Kamloops has also reduced in recent years, meaning fewer listings on the market at a given time.

“For a healthy market we should have about 2,500 listings at any given time. And we’re approximately at about 750,” notes Mann.

However, overall inventory in Kamloops did increase last month by 11.4 per cent compared to December 2022, at 740 active listings.

Market activity could also shift with mortgage rates in 2024 trending down. Travis Colman, with Colman & Associates Mortgage Consultants, says it’s difficult to accurately predict where rates will settle, but his firm projecting a new normal for mortgage rates — hovering around the low 4 per cent range.

“Something like 60 per cent of mortgages are up for renewal in the next two years. Rates are trending downward a little bit, finally — which is good,” said Colman. “We are seeing the Bank of Canada continue their pause on rising interest rates. There is a pretty good chance we see a rate cut by the beginning of Q2, maybe April sometime.”

There’s typically a lull in home sales activity over winter, and Mann says that easing could be a window for hopeful buyers, before it picks up in later 2024.

“I do think that things are going to heat up again moving into the spring and forward into the fall,” she said.