Saturday, October 20, 2007

Building during a Boom

You just have to look at the number of billboards from Osoyoos to Vernon advertising vacation resorts and condominium projects to get a feeling for the incredible growth the Okanagan valley has and will experience for years to come. So if you are a home owner looking to renovate you are likely experiencing some frustration in the availability of quality trades at a reasonable price. If you are new to the area and looking to build a new home then you are looking at some long waiting times and high budgets to pull off your dream. The Okanagan has an incredible number of quality builders, designers and trades but this has come to a bottleneck with many backed up for over a year or not taking on smaller projects. There is also the tendency for an increase in miscommunication leading to mistakes and fly by night contractors taking owners for a ride during these busy times

Looking at the 2007 economic profile prepared by the Economic Development Commission (EDC) . It appears that continued growth will buck the economic slowdown experienced in other parts of North America. The profile shows that the central Okanagan business sector is moving to diversify and confidence is at an all time high. This can only be bolstered from the recent announcement that the Kelowna Airport will be expanding capacity and lengthing their runway to accommodate direct International traffic, particularly from Europe. Did you know that 33% of Okanagan residents have ties to Germany! The main driver in the central Okanagan is and always will be the construction sector. Since the first wave of retiring baby boomers in 2003, the central Okanagan has experienced new starts exceeding the echo boom of Expo 86. Statics show that the Okanagan is the main Canadian retirement area and that more people are buying here to live rather than work. We can only guess what may happen in 2010 when we are introduced to mainstream international markets. But there has been signs of leveling off in some sectors. I believe this shows how our current market is affecting the “average” resident. The building trend has been offset by the high cost of development, lot prices and wage increases and skilled labour shortages. Building a single family home may be a luxury that most working families can no longer afford. If you were wondering the average new house price in the Central Okanagan has gone from $124k in 1990 to $225k in 2000 to a staggering $560k in 2007. My 35 year old home has nearly doubled in value in under 3 years. Projects are taking longer and costing more. The average renovation project is taking well over 12 months to complete. More and more home owners are being forced into running their own job and/or physically doing some of the work themselves to reduce time and costs or in fact just get their project started.

So what is being done to improve our situation.
• The EDC is looking a ways to import foreign skilled labour for short and permanent residence.
• Organizations such as the Canadian Home Builders Association and the Southern Interior Construction Association have been working with local and provincial bodies to develop local skilled labour.
• A number of businesses and construction methods have been introduced to streamline and improve the quality of construction.

But even with these improvements most owners will be required to be more involved in the process. The owner will have to educate themselves on the full process from lot purchase to codes and bylaws to the design and contracting phase. Stricter provincial regulations have put more responsibility on the home owner when it comes to building their Single Family Home. Having a better understanding of the entire process and taking the time in the planning process and hiring the right people to help you will greatly improve your chances at a smoother and economical project.

No comments: