Kelowna Real Estate Market Faces Its Biggest Test Since the 1990s

“We Are in a Recession”: What It Means for the Kelowna Real Estate Market in 2025

CIBC economist Benjamin Tal says Canada’s economy is already in a per capita recession, with BC among the hardest hit regions.

According to CIBC Deputy Chief Economist Benjamin Tal, Canada’s economy has entered what he calls a “per capita recession,” even if it hasn’t yet met the formal definition. Speaking recently to mortgage professionals, Tal described the current period as the biggest test for the housing industry since the 1990s.

“We are in a recession. If it’s not a formal recession, it’s a per capita recession for sure—especially if you live in Ontario and BC,” Tal explained.

The Reality on the Ground in Kelowna

In Kelowna’s real estate market, the effects of this economic slowdown are becoming clear. Sales volumes have softened, listings are sitting longer, and affordability remains a major concern for buyers.

While single-family homes in Kelowna that are priced correctly are still selling, the condo market, particularly in the high-rise and pre-construction segments, has cooled significantly. Developers are facing high material costs, and many potential buyers remain hesitant due to elevated mortgage rates.

As Tal put it, many Canadian cities are in a state where homes are too expensive to buy, yet not profitable enough to build. Kelowna is no exception. Supply remains limited, but demand is restrained by financing challenges and buyer uncertainty.

Interest Rates and Housing Affordability

One of Tal’s strongest messages was directed at policymakers. He urged the Bank of Canada to begin cutting interest rates and called for tax relief measures,  including removing GST and HST for homebuyers, to help restore affordability.

Several major financial institutions, including RBC and Scotiabank, are also predicting rate cuts in the coming months. However, Tal cautioned that the real impact will be felt when a large number of Canadians renew their mortgages in 2026. He estimates that roughly 10% of homeowners could face payment increases of 50% or more if current rates persist.

For Kelowna homeowners, this could lead to more listings coming to market as families reassess their budgets, while buyers with strong financing will find new opportunities.

Population Growth Keeps Long-Term Demand Strong

Despite short-term challenges, Kelowna’s population growth remains a stabilizing force. Tal noted that Canada’s housing demand is likely underestimated due to undercounted non-permanent residents, suggesting that more people are competing for housing than official statistics indicate.

Here in Kelowna, steady immigration and interprovincial migration continue to support long-term housing demand. Young professionals, UBC Okanagan students, and retirees alike are drawn to the region’s quality of life and relative affordability compared to the Lower Mainland.

This underlying demand means the Kelowna housing market is expected to rebound once borrowing costs begin to ease.

Looking Ahead: What Buyers and Sellers Should Expect

Tal projects that Canada’s housing market will remain in a holding pattern through much of 2025, with improvement expected in late 2026 and into 2027. For Kelowna real estate buyers and sellers, that means patience and strategy will be essential.

Our team at Hilbert&Crick Real Estate notes that while prices have stabilized, this environment presents unique opportunities for motivated buyers, investors, and upsizers who can take advantage of softer competition and more negotiable deals.

“This isn’t a collapse, it’s a correction,” says the Hilbert&Crick team. “For anyone thinking long-term, Kelowna real estate continues to be one of the most desirable and stable markets in BC.”

Expert Guidance for a Transitional Market

Whether you’re buying your first home, selling a property, or considering an investment, navigating the Kelowna real estate market in 2025 requires local expertise. The professionals at Hilbert&Crick offer trusted guidance based on deep market knowledge, proven experience, and a commitment to helping clients make confident, informed decisions.

Ready to make your next move in Kelowna?

Connect with us today at Hilbert&Crick for a personalized market analysis or to discuss buying or selling opportunities in the Okanagan. We’d love to help you!