114: 2026 Predictions - What's Ahead for Kelowna's Real Estate Market with Tradecraft's Jeff Hancock & Shane Styles

00:00:00 Taylor Atkinson
Welcome back to the Kelowna Real Estate Podcast. I'm your mortgage broker host, Taylor Atkinson.


00:00:03 Matt Glen
And I'm your real estate agent host, Matt Glen


00:00:06 Taylor Atkinson
Hey, good episode today. We invited on, well, back on Shane Stiles and Jeff Hancock. Both been on individually, but yeah, we put great minds together for a great show. It was awesome. Kind of just point by point through the Kelowna market.


00:00:19 Matt Glen
point by point through the Kelowna market. I think I learned a few things, which is hard for me to do.


00:00:26 Taylor Atkinson
Yeah, they are incredibly analytical guys. cover a lot of the market and have a ton of history. So points that we kind of discussed, we did it kind of like a sports show. Just we tried to do rapid fire. It was more like a cannonball, just like slow, but really, really powerful.


00:00:45 Taylor Atkinson
Yeah. Yeah. I hope so. I'm just thinking like after watching a lot of sports this fall, like Hazel Lane, she is still going, eh? That's like a 25 year history, just like sports broadcasting. Impressive. But yeah, so on today's show, we talked about new home values, condos, townhouse, single families, lots, values going up, down. So it's kind of like a prediction what we're doing for 2026. Then we spoke about commercial real estate. We also spoke about the difference between now and 2008. You know, some people have some feelings of today's market similar to that. We touched on indigenous land claims. So also we had a great show a couple episodes ago about that with Tom Isaac. We discussed vacancy rates and rental construction. So, you know, purpose built. rentals, Airbnb rule changes, and then we just kind of aired our grievances. It's a bit of a longer show, but absolutely packed with a ton of good information that we just kind of want to jump straight into.


00:01:39 Matt Glen
Yeah, I think it's good information to get the year started to where you kind of have a snapshot of where we're at and where the experts think we're going. All right, guys, enjoy the show. And this show, like every show, sponsored by Century 21 Insurance Realty, best brokerage in town, best brokerage in the BC. We are everywhere. We're growing Okanagan. Kamloops, Kootenays, East Kootenays, Salmon Arm, we're everywhere. Residential real estate, commercial real estate, property management. Basically, if there's real estate, we are the brokerage for you. So if you're an agent looking for a spot to land, or if you are a buyer, a seller, or a property investor, or somebody that wants to buy some commercial real estate, give us a call. We are the people to help you out. Thank you guys. Enjoy this awesome show.


00:02:24 Taylor Atkinson
Okay. Welcome to the show. Jeff Hancock, Shane Stiles from Tradecraft. How are you guys doing today? Doing well. How about you? Very well. I should say you're both returning guests. Just separate though. Yeah. How did you guys... become one on this show.


00:02:40 Jeff Hancock
Yeah. So I started Tradecraft like 10 years ago, I think, pivoting out from a position at the city of Kelowna and, you know, really started doing market feasibility work when the market was changing and accelerating. Ended up helping a lot of developers that I had relationships with from my time in the Lower Mainland that had assets up in the Okanagan, as well as doing work with municipalities and other, you know, service providers, utilities, that kind of idea. So it's kind of a range. Tradecraft, I don't have to get too deep into it, but we offer a pretty wide swath of services. And at the time before Shane and Kayla came and joined us, it was primarily supporting municipalities in technical real estate work, as well as doing upfront market feasibility work for developers looking to build multifamily or mixed use or commercial, that kind of idea. And then when Shane and Kayla left Epic Real Estate, they came over and joined me and we've continued to grow the service offering and what Tradecraft is. And yeah, that's sort of it. Yeah,


00:03:35 Shane Styles
from my end, I've been in the real estate space for just over 25 years, mostly in the pre -sale world. And I'm from Kelowna, but most of the work we've done, about 2 billion in transactions all over the world. From Mammoth Mountain, California, to Bangkok, Thailand, to Vancouver, Calgary, Whistler, and a ton in Kelowna. I was leading a firm called Epic Real Estate. We were a project sales and marketing specialist firm. But then 2023, the end of 2023, The writing was on the wall. I saw the presale project, condominium, townhome, multifamily world was going to implode. And so I started to make a pivot about two years ago. And Jeff and I have always been acquaintances. And I've always had a consulting kind of practice on the side, supporting developers. And we talked one day and he said, you know, what you do works as a perfect complement to what I'm currently doing. Why don't you come and join me? So we said, great. And we love working together. We love working with each other. And Kayla came with me from my previous venture. And the three of us kind of spearhead everything that's going on at Tradecraft. And we have some associates. And we're going to probably have some pretty big changes in the course of the next month that are really going to expand our offering to help full -service development really in Western Canada. but you know if there's a developer they've got a piece of land or they're looking to acquire a piece of land they've got capital but maybe not the expertise we're going to be able to fully help them execute on that in whatever they want to do so that's interesting you said that you saw the ready on the wall for the pre -sale market at the end of 2023 oh yeah right so because i'm just thinking


00:05:08 Matt Glen
that's interesting you said that you saw the ready on the wall for the pre -sale market at the end of 2023 oh yeah right so because i'm just thinking


00:05:12 Shane Styles
yeah right


00:05:15 Matt Glen
The beginning of 2022 is when the interest rates started to tick up. So the resales started going down at 2022 and then the resales at the end of 2023 started to fall. Yeah.


00:05:24 Shane Styles
So our fingers on the pulse of the market on a daily basis and in the pre -sale market. And so much of what we do is about metrics. we have a campaign and we know how many people should be registering online we see the conversations are having with the sales people in real time and we can tell by the tenderless conversations what the mood is and when you go from expecting 100 registrations a day to 20. That delta tells you something, right? So we're seeing this across multiple projects. We'd watched the price escalation, which was fantastic. But it's funny, in January 2022, we told a development partner, I called him up. We were supposed to launch this project in June. And I said, I've been through three market cycles in my career. I can feel it. It's coming. Can you advance your project by three months? We need to launch this thing at the end of February. And very astute guy, Kevin Edgecombe. He knows what's going on. He's an incredible builder. And so we advanced everything. We pulled it up and we peaked out the market. Like we sold out his project at top dollar wood frame downtown Kelowna. And it was great. The timing was good. We were very fortunate. It's just a gut instinct from 25 years of doing this. And then we just saw it start to change after that. And it just got, that was sold downtown, sold Koston. So, fantastic project. And it was good. And as much as I love to do real estate, I also love to buy real estate. And in 2007, the Waterscapes project was coming to town, Lettingham McAllister. I got really excited about it and went and bought a condo there, a pre -sale condo. We bought it in 2007. We closed in 2009. From the time that we had bought it to the time that it had closed, it had gone down $80 ,000. Okay. So my entire deposit was gone, but I'm also lawyer averse. So I just said to my sister, who's my partner, I said, you know what we're going to do? I said, I understand real estate. We're going to close on this place. We're going to put a renter in and set it and forget it. About a year and a half ago, we still own that condo today. I took it and I did a cap rate analysis on it, like an IRR calculation. It's returned 10 .4 % return. Even though the day that we closed on it, we were down 80 grand. So like they say, it's not timing the market, it's time in the market. And am I glad that I own that asset today? Absolutely. It's been a great asset. The debts, you know. Okay. Oh yeah. Yeah. Like of course everyone liked to try to time stuff. And like I say, that story with Kev, I wouldn't say we got lucky, but we were just. you know, on our game, I've made the mistakes too. I just gave you an example of it.


00:08:05 Taylor Atkinson
you an example of it. I mean, there's a lot to unpack within that. I think for today's show, we kind of wanted to do this almost annually, right? At the beginning of each year to put you guys under, under the gun here and, um, do some predictions because no one's really been doing a lot of predictions the last couple of years. They're harder to come by. So today we're just going to put you in the hot seat. few minutes each segment. We'll kind of go through new home values, commercial real estate values, difference between now and 2008, which we were just speaking about. Indigenous land claims, which one of our last shows was about vacancy rates in rental construction, short -term legislation. I mean, we're just going to highlight this as specific to Kelowna, you know, Okanagan area, right? We're not reaching out to...


00:08:45 Jeff Hancock
to... yeah that's important to clarify because you know really that's where our focus is and that's really what we're speaking about today so new home values i'll just go through the product types so in my opinion and again this is just my humble opinion so take that with a grain of salt but i foresee condo products still probably coming off another five to ten percent in 26 based off of You know, the amount of standing inventory that we're going to start seeing in the marketplace or that is already in the marketplace, as well as, you know, population growth numbers and just, you know, general market malaise. But I do think, you know, on a positive note, I think that probably a great time for people that are really interested in that product type to buy. You certainly have leverage. You're talking to developers with standing inventory. And I also feel that. You know, in the next couple of years, because there's almost no new condo product in the pipeline, we're going to see, you know, another pretty aggressive price spike. You know, once all the standing inventory gets cleared out and the market normalizes, I think people that have bought at this point in time are going to feel pretty good about things. Townhomes are harder to make work on a new like development side. Like it's just, it's tough. So there's not a lot of inventory on the townhome side of things. So I would suggest that townhome market probably is going to be pretty stable. I think we're kind of bouncing along the bottom there when it comes. to pricing in new townhomes. Single -family homes, I think new single -family homes are still strong. I mean, I think people move here to live in a single -family house. You know, values have come off. They are probably going to, similar to townhomes, just kind of bounce around kind of where they are currently. I don't really think you're going to see another major dip when it comes to values. Maybe prices are going to reduce slightly on lots just because of the risk involved and spec builders having to... know be a little bit more concerned around you know who is their end buyer for this type of product that kind of idea so i do feel like that risk will get baked in and it'll end up coming out of the land so basically pretty stable for most condos are going to come off a little bit more but i think we're kind of around the bottom right now and that again caveat interest rates you know that kind of idea just a quick question so it feels like we're kind of at the end of like the purpose -built rental boom is agree of that


00:10:41 Matt Glen
a quick question so it feels like we're kind of at the end of like the purpose -built rental boom is agree of that So is there any more coming on? Is that going to affect the condo value at all? Well,


00:10:50 Jeff Hancock
there is still a purpose -built product that's under construction that has not come to market yet, which is going to push vacancy rates higher than what they already are. And I think we're going to get to the purpose -built piece down a little lower on here, but the purpose -built rental market is very soft at the moment and developers are pulling back. I think long -term guys have a pretty positive outlook when it comes to the Okanagan purpose -built rental product. But generally right now, over the next call at two to three years, anybody that's in the ground will obviously complete, but I don't think you're going to see a lot of other guys get shovels in the ground.


00:11:20 Matt Glen
I guess I was just curious about how it's going to affect condo prices.


00:11:23 Jeff Hancock
I mean, from an investor buyer, like investor buyers that are looking to rent, you know, they're going to be watching vacancy rates and watching rents. So yeah, there might be an impact error. The other important point to make there too is short -term rentals and, you know. to changing the legislation and the city now opting out. Who knows how that's going to affect things? I think it's going to be positive depending on what the zoning ends up looking like for the projects that are going to be inclusive and are going to be, you know, licensed to offer short term rentals. I think you're going to see either values get void or at least stabilize in those, those projects. So like the Caban, the Aquas, those kind of, yeah. The way they were supposed to be in the... Yeah, exactly. The way they were supposed to be. Yeah, where the government took our land rights. I would echo what Jeff's saying just to add a little bit more to it because it really was my... space the pre -sale real estate world you know and matt and i you and i share in the residential real estate world same thing i think condos like year over year they peeled back on the medium price of a condominium by about four to five percent


00:12:00 Shane Styles
would echo what Jeff's saying just to add a little bit more to it because it really was my... space the pre -sale real estate world you know and matt and i you and i share in the residential real estate world same thing i think condos like year over year they peeled back on the medium price of a condominium by about four to five percent Townhomes stayed pretty much dead even, 24 over 25. And single families were up just over a point, like 1 .5%. It stands to reason. One interesting thing with condos is when you look at MLS data, which is really solid data, it doesn't show you all the shadow inventory. So if you take all the standing inventory that's unsold new condo, my guesstimate, looking at all the projects, knowing what's left over, there's probably about 700 plus or minus. add that to the existing condo inventory and then do your months of inventory calculation, they're still going to keel back a bit, right? However, when you look at our market, the central open organ compared to the ones that get all the press, Vancouver and Toronto, like we're pretty stable actually. And because we feed from so many other markets, right? We feed from Vancouver, we feed from Edmonton, Calgary, Toronto, Saskatoon. those sorts of places so yeah condos peel back a bit townhomes i think are gonna stay fairly flat single family i think personally is one of the strongest asset classes right now because they're just not making any more of it yeah yeah so i agree with all that i think the only thing i would add is probably got to break down single family home slightly i think sub a million that's likely i mean in today's world flying off the shelf like those are those are selling


00:13:30 Taylor Atkinson
i agree with all that i think the only thing i would add is probably got to break down single family home slightly i think sub a million that's likely i mean in today's world flying off the shelf like those are those are selling Sub a million and a half with a suite. Yeah, that's a good purchase. Sub a million and a half without a suite. Those are getting a little tougher. And then anything pushing over a million and a half, like that's still on the declining from what I've seen. Like, I mean, Matt can speak to this, but it's from the appraisal point of view. There are no comps that are supporting, you know, two, $3 million sales. Those products aren't moving. So when we're doing any refis at that level, really struggling to get to the value that people thought they had or had four or five years ago. Because the buyer of that home is not the buyer.


00:14:09 Shane Styles
buyer of that home is not the buyer. today you know i just did a transaction and that buyer was a couple they were in their 60s they are retired one of them still working a little bit they don't need to they have all their real estate wealth already established price actually was not as much of an option they just wanted to make sure they weren't overpaying and they didn't want to be in a condo or a townhome so they bought a single family home asset and it needed to be turnkey And they need to be pristine, ready to go, likely less than two years old or had a major renovation in the last couple of years. Think about that buyer, though. They're coming from all over. I actually have one buyer just like that coming from the States right now, prepared to pay all the appropriate taxes because they see value and they want to be in the central and be in Kelowna.


00:14:55 Taylor Atkinson
I mean, it will self -regulate at some point. Toronto and Vancouver, yeah, those are some pretty bad markets. The supply here is not like as oversaturated as there, but it's still, it's still pretty bad on the condo side, but yeah, single family homes, you know, the cost to build, the cost of land just doesn't work right now. So no one's building. So the supply is diminishing. And we're being zoned out of that too, right? Yeah, absolutely.


00:15:14 Jeff Hancock
Yeah, absolutely. To find it.


00:15:16 Taylor Atkinson
Totally. Yeah.


00:15:16 Jeff Hancock
single family. I agree with Shane and you guys completely that I think that's the strongest asset type for 26.


00:15:21 Taylor Atkinson
Yeah. Okay. Commercial real estate values. What's happening? How do we make land development work in 2026?


00:15:27 Jeff Hancock
It's going to be difficult. You know, I think there's so many different markets within, you know, the broad term of commercial markets. So is it, you know, retail leasing? Is it development land? Is it, you know, IPP? So, you know, I can talk to some of it from what we're seeing. Through William Wright commercial, leasing is strong through retail office, surprisingly, and remains relatively steady. Strong is maybe not the right word, but it's steady and deals are getting done. Add values that make sense. Development land is probably the most challenged commercial asset right now. There's a lot of available development land across all products, whether it's zone NF2, MF3, whether it's 0 .5 of an acre, whether it's six acres, there's a lot available out there. The bid ask is still pretty wide. slowly starting to compress. And I think, you know, sellers are starting to understand that, you know, they're not going to get their money out of this. Somebody's going to have to take a bit of a beating and it's going to end up being them. So development land, I think still has some work. It needs to be really well located. It needs to be, you know, obvious value add and price that somebody can perform it right away. There's a lot of interest still when it comes to income producing properties. So we're still seeing a lot of groups, you know, both locally and outside of the central Kanagan marketplace looking for those types of assets. So, you know, whether it's a strip mall or whether it's, you know, a fully leased office building in a good location, you know, guys are looking at those types of opportunities from a yield perspective, but also from a, you know, future development perspective. So if there's, you know, the ability to rezone it or there's excess land that they can build on. those are still in high demand. And, you know, we're seeing deals get done in that type of product. You know, on the industrial side, Strata Industrial, that kind of stuff, it's sort of steady, I would say, that product type. But a lot of that product type up here is driven by, you know, smaller construction groups. They like, you know, a 2 ,000 square foot industrial unit or some sort of construction supporting, you know, business. And those businesses are right now concerned about, you know. about the marketplace and about you know the construction industry as a whole in terms of where lease rates are for commercial and i'm speaking more like industrial you know office retail type of thing are we predicting that those are going to go up or down and i'm basing that on the fact of like okay well is there anyone developing in that space right now is there going to be more supplies that what's going to drive lease rates down or vice versa industrial strata there's a number of projects that are actively selling right now most of those are sort of


00:17:27 Taylor Atkinson
terms of where lease rates are for commercial and i'm speaking more like industrial you know office retail type of thing are we predicting that those are going to go up or down and i'm basing that on the fact of like okay well is there anyone developing in that space right now is there going to be more supplies that what's going to drive lease rates down or vice versa industrial


00:17:47 Jeff Hancock
strata there's a number of projects that are actively selling right now most of those are sort of older, contemplated from 2021, 22, and now we're just in market, still selling. I don't think there's a lot of new projects in the pipeline that you're going to see. The numbers just don't make sense. Give you some context. So like high watermark for industrial strata was probably around $500 a foot, kind of bumping up against $500 a foot and great location, great pandemic. Don't get me wrong, like everything's relative, but sort of hitting up close to that number. And now we're seeing that same type of product kind of in that. 325, 340 range. That's a big delta. Huge delta. And, you know, there's a lot of developers that are left holding the bag, right? You know, that got caught in that. You know, on the positive flip side of this, it's, you know, if you are a small, you know, electrical, you know, plumbing. HVAC company and you're looking to own your own real estate and you feel confident enough or you, you know, you have the financial wherewithal, this is a great time to go and buy a strata. You're not going to see strata units, industrial strata units have this type of value again. It just cost to construct is just too high. So yeah,


00:18:49 Shane Styles
it's still a buyer's market. Mercial IRA isn't. Exactly. Exactly. Right. I think coming to 26, if you're an astute buyer and you want to make a purchase, it's a really, really good time to be buying. Totally agree on both the residential and commercial side.


00:19:01 Jeff Hancock
and commercial side.


00:19:02 Shane Styles
Yeah, there's going to be some great deals to be had. Yeah. Jeff, I have a question for you. I'm guessing that the cover play commercial must be still pretty sought after.


00:19:11 Jeff Hancock
Yeah, for sure. Cover land play, right? Like again, IPP, you know, buying underutilized. maybe poorly managed strip mall in the path of growth you know you get a five percent yield or five and a half percent yield you can you know put some squad equity into it and get those lease rates up refi get some money out and in 10 years you know it's going to be able to be rezoned to mixed use or something like that right that is the unicorn out there and if you have that as a commercial broker you're going to have a lot of interest and there's a lot of guys out there looking for that type of product


00:19:45 Taylor Atkinson
I mean, you kind of alluded to this in kind of the intro, so maybe you can take this one to start. Difference between now and 2008. Difference between now and 2008.


00:19:51 Shane Styles
between now and 2008. Well, 2008, everything just stopped. Like it literally stopped from one day to the next. Nothing was going on. Everybody was laid off in the pre -sale real estate world. I shouldn't say everybody was laid off, but every project ended. That didn't happen here. Right. Things just kind of, you know, mortgage rates rose and the market tightened up and it kind of just, it kind of slowed down. And we've had these last couple of slow years. But the biggest difference in 2008 to now that I see was we didn't have inflation back then. The costs hadn't changed. Just the market demanded change. Yeah, good point. Right. And the other thing that I think is a little different and why there's still real estate transactions and it's still a good strong market is. Back then, the calamity was the stock market, right? And that affects pretty much everyone, right? If you look at the stock market today, it's still pretty much on a tear, right? So, you know, that buyer in 2008 who was a physician with a good income, but his investments had a lot of exposure to the stock market, he panicked. Today, he's not panicking. He still gets his salary. right? Makes good money. And his portfolio, his investment portfolio is doing really quite well. So that's a real positive thing that's different from today to back then. It's just the costs are so much more than they were.


00:21:19 Jeff Hancock
Yeah, I totally agree with everything you said, Shane. I think one other layer is, you know, provincial regulations, different taxes, different restrictions. You know, we didn't have those in 2008, like foreign buyer tax. 2008, we've recovered a lot quicker because, you know, investment could flow in. you know, take advantage of the opportunities in the market. Whereas now we're so restricted, there's not that same ability for outside capital to flow in. So I think that's going to kind of keep it where we are for a while.


00:21:46 Shane Styles
Demographics are in the central Okanagan's favor as well, because that baby boomer class who have all their real estate wealth, I know that's much to the chagrin of a lot of other generations, but they'll make their move and they'll come to the Okanagan or move within the Okanagan because they've already established their wealth. So we just have more of those today in 2025 than we did in 2008, 2009, right? They weren't quite making that move yet.


00:22:10 Matt Glen
How did we eventually crawl out of the 2008 situation and then how does that map onto where we're at now?


00:22:14 Shane Styles
Well, there's a couple other big differences for the Central Okanagan in particular. UBC, Okanagan College, okay? They're vastly different than they were even just in 2008. They're probably tipping between the two of them at 17 ,000, 18 ,000 students.


00:22:29 Matt Glen
And we have the new campus coming downtown.


00:22:31 Shane Styles
Right. So that's a big, big deal. And those are, you know, good, solid paying jobs. Those are people coming here to go to school that already have their budget fixed for their accommodation and their food and entertainment and books and all those things. So that's a big difference. Our economy is more diverse. Right. You know, COVID created an opportunity for people to kind of live wherever they want to do. And even though there's a lot of back to work and back to the office, which Jeff would see, that's still happening. And we all know someone here who lives in the Okanagan, lives in Kelowna in particular, and works around the world. Oh yeah. Yeah. Yeah, for sure. So those are a couple of differences I see.


00:23:12 Taylor Atkinson
2008 is funny for me to think of. I'm trying to, as we're talking about it, like you, I bought a condo in 2008. It was owner occupied. My first one was a rental, but I was so naive, like being the end user. I just did not know what was really happening in the market. Like I literally bought probably the worst day, you know, in the previous 20 years, but I needed a place to live and I got approved for a mortgage and I just did it. I didn't really think much of it. I'm thinking now like end users, are they more, well, they're easy to be more sophisticated, but like, are they more sophisticated? Yeah. Are they more sophisticated to me because now everything's at their fingertips, right? There's, there's this podcast, there's social media, there's LinkedIn, there's chat GPT. Are you guys seeing that from consumers or is it now just my mindset now being like, oh, now I can really dive into the data then and now and figure out where the opportunities are. Or are people buying now just being like, Hey, I need somewhere to live. I don't really care. I feel it. See me like there's like a society wide analysis paralysis. Well, would I be any different as that end consumer now? Like maybe a question for you, Matt, like your clients, are they buying now? Is the confidence there to buy? Because I feel that's maybe the difference where in 2008, I was still confident. I was like, yeah, I want to live in the Okanagan. I need somewhere to live. Price, I am approved, so I'm afforded. Who cares? Now are people like, I just have no confidence in today's market. Like, is the sky still falling? Is that? What the difference is?


00:24:37 Shane Styles
This is a story. It's not central Okanagan related. It's Revelstoke related because we're doing some work in Revelstoke with the developer there. And got a small project. It's 24 homes. The developer had a tough time because they were kind of positioning a short -term rental and they were going to do that. You know, everybody from outside of Revelstoke is going to come and buy these places. And he came to us because he was in a bit of a pickle. And we looked at it and we said, you know what? There's a completely unsatisfied market in Revelstoke and they need a place to live. And it's people that work there. It's first -time buyers, just exactly what you just explained. And the amount of interest we've had from people that have really good jobs, you know, a conductor with CP Rail, an accountant with KPMG in Revelstoke, you know, a ski tech who's been working at the resort for five years, loves his job, doesn't plan to change, loves the outdoors, why is there. Every single one of them says the same thing. I want to start paying my mortgage, not somebody else's mortgage. Yeah.


00:25:30 Shane Styles
And so the timing isn't as big a deal for them. They just want to start. If you look at your mortgage broker, obviously you look at it and you go, okay, let's just take a $1 ,500 a month payment. How much of that goes to principal and how much goes to interest, right? Say there's 500 bucks goes to the principal. That's 500 bucks you're putting back in your own pocket every month. These young people recognize that. They get it. And that was my mindset then too.


00:25:53 Taylor Atkinson
that was my mindset then too. It was the same, like, why would I go rent a place if I'm approved to buy? It is interesting though,


00:25:58 Matt Glen
is interesting though, that now that we have all this more information, is it creating more reluctance in the market? It was an interesting thing to think about.


00:26:05 Shane Styles
Well, listen, there's reluctance in the market. The uncertainty that's been created in the province of British Columbia, I'd say in the country for that matter. That uncertainty does not bolster real estate confidence.


00:26:16 Taylor Atkinson
Easy segue, and this was one of our recent episodes. Pat on Matt and I is back. I think it was an awesome episode. And thanks to Shane for prompting us. It was an incredible episode. So, Cowichan Tribe with the land, specifically in Richmond, and obviously it's kind of province -wide. What does this mean to you guys? Boots on the ground, implications of capital. Would you buy First Nations land? Which is kind of a funny question to ask because really it's like... The library inch is almost of safer product. You already know. You just took the words right out of my mouth.


00:26:42 Shane Styles
You just


00:26:42 Taylor Atkinson
took the


00:26:42 Shane Styles
words right out of my mouth. The irony today is that buying something on First Nations land may be safer. Now, having, again, been in this market for a long time, 20 years ago, First Nations land traded at a massive discount. Everybody, you know, I would have a customer come to me and say, oh, is this First Nations land? They wouldn't even have the next conversation. They just leave, right? That's completely changed. You know, and it's trading pretty commensurate with regular value. So, yeah, it all depends on the land, that sort of thing. I actually think this happening is really great, what's happened with Richmond, because it's actually bringing stuff that the general public need to know and understand, because it affects all of us. So it's good for that to happen. But like so many news stories, I think in the general public, they are really active for a couple of weeks, maybe a couple of days, maybe a couple of hours, and then they start to go away. and it becomes less of a concern matt you've probably had this happen i had this happen about six weeks ago some folks buying a property they happen to be buying a property near salmon arm and they said should we be worried about this and so i had to coach them that i didn't feel they need to be worried and here's the reasons why i didn't think they'd be worried and i don't think they need to be worried about it i think it's going to get rectified but it is absolutely a concern and the provincial government needs to be worried about it and they need to help solve the problems so that we can reinstall confidence. And on the commercial side, Jeff will speak to what's happening with large capital transactions.


00:28:09 Jeff Hancock
Yeah, definitely. I mean, I certainly have an opinion on this subject. Capital moves fast and this is just another layer of risk in a province that's already very difficult to do business in. And, you know, guys don't need to dig in too deep on this. They just see it and say, I don't want to deal with that. And I'm going to go. to Calgary or I'm going to go to the U .S. And, you know, anecdotally, you're already hearing about that. I can tell you personally, I've experienced it. So I was dealing with a large lower mainland developer operator, you know, huge numbers, big company. And, you know, I was tasked with trying to find retail assets, standalone retail assets in the Okanagan for them. This is probably 2023, you know, so working with their VP of acquisitions, you know, for months, months and months. This announcement comes up and. you know there's a pause and you know within probably a month i get an email back saying you know what the board's made a decision we're no longer going to be you know interested in investing in bc we have other options other options across the country other options in the us you know appreciate your work and you know if things change we'll let you know you know there was other factors and again kind of alluding to you know other provincial you know regulations and you know restrictions that impacted this decision but this was one of one of the reasons. And at the end of the day, you know, these guys have options. They're not going to make a bunch of noise. They're not going to go onto social media and post it. They're just going to go away and they're just going to disappear. And what does that mean? I mean, you know, potentially, obviously a commission that I'm going to miss out on, but it also means investment. It also means jobs. It also means all sorts of different, you know, spinoff. effects. I'm not an Indigenous lawyer. I don't, you know, I'm not a specialist in reconciliation, but something as fundamental as freehold land title rights, like it needs to be rectified immediately or else, you know, we're going to end up in a rabbit hole that we don't want to be in.


00:29:56 Matt Glen
Especially like our entire economy is, oh yeah, it's a market. 100%. I had a conversation with a colleague of mine a couple of days ago.


00:30:00 Shane Styles
had a conversation with a colleague of mine a couple of days ago. She had a homeowner who asked the same question. Should I be concerned about this? So she went to city planning. and said, hey, can you tell me, are there any claims on this parcel of property? They said, well, we don't know. We wouldn't know. Okay, so that's the first stop. She said, where should I go? And so city planning said, well, go to land titles. So she reached out to LTSA land titles. And are there any pending Aboriginal claims on this land, that sort of thing? We don't know. I'm sorry, we can't help you. So she called a title insurance company, just asked them a question. They said, we don't know anything about that. And our insurance doesn't cover that sort of thing. That's pretty interesting, right? She did get pointed from land titles to the BC Treaties Commission website, which is pretty interesting. It doesn't tell you if there's any claims. My point being is there's a lot of uncertainty. And then there's no place to find the answer.


00:31:02 Taylor Atkinson
Totally. So we're referring to Tom Isaac. I feel like he gave us like three websites you could go to. I told him that they needed to make an app.


00:31:09 Jeff Hancock
Yeah, this is our next. Yeah, it needs to be simplified and layered on to, I guess, similar mapping so you can see your own property. So I made a joke about having three planes,


00:31:16 Matt Glen
I made a joke about having three planes, but there are cases where there's. Oh yeah, multiple planes. Multiple, the same land is claimed by like three different. Well,


00:31:22 Shane Styles
if you go on that BC Treaties Commission website, Tom might have mentioned, I'm not sure. You can just click on each of the bands.


00:31:29 Taylor Atkinson
Yeah.


00:31:29 Shane Styles
And you'll see the overlapping lands. It is kind of interesting.


00:31:32 Taylor Atkinson
But this is where the hard part is, is where does the liability then land? Is it the real estate agent, the lawyer? Like it's ultimately the person purchasing the property, but like there's zero confidence in their ability to do the due diligence because it's near. And everybody's going to,


00:31:45 Jeff Hancock
everybody's going to, you know, pass that thought, right? Everybody's going to cover their ass and say, okay, you know what? I can't tell, you know, the realtor is, the lawyers are, everybody's. And ultimately you're right. It's going to end up back on the homeowner. But really, I think it should end up on the provinces. doorstep. Absolutely. Yeah. That's the problem.


00:32:02 Shane Styles
That's okay. The province will solve all. They'll just take $150 million and they'll backs up everything. Oh, pardon me. Is that our money? Our tax money? Yeah.


00:32:11 Taylor Atkinson
You know, it's funny because some of our like social media reels have really taken off, but then you start seeing some comments and we're kind of in this echo chamber, right? But some of the comments are almost like, yeah, great. Like the system's going to collapse. And same when we did Airbnb, like short -term rental legislation, some people were like huge advocates of this. Like finally the market's going to crash and then I can buy. But what they don't understand, and you were talking about this before, is it's the capital, right? Like the capital will start these projects, then create supply. And that's the issue. It's not that we want prices to crash. We want supply to come in. So there's an opportunity for everyone to own a whole universe now.


00:32:47 Shane Styles
Listen, the CMHC select mortgage program for multifamily building purpose -built rental has been a fantastic success.


00:32:55 Matt Glen
It's an incredible program. Basically the only thing that pencils right now, or one of the best things to pencil.


00:33:00 Shane Styles
Yeah. And it's, you know what? The federal government in putting that in did a great job. You know, full stop. I don't want to say that very well. From my end, because I'm more on the residential and user side, it would have been nice if they'd done something for the mom and pop investor. Yeah. Right? Look at that. Like everything's geared towards someone who's a large, massive multifamily builder, right? Not towards Bob and Linda who want to augment their pension. buy a rental condo for their kid to go to UBC that they're going to rent out afterwards. Nothing for them. The general public should be pretty upset about that.


00:33:34 Taylor Atkinson
Even just for single family home builders, right? Like sure, GST rebate, which is not like, I still don't think it's the best. Could be just like a GST exemption right off the bat. But like, why can we not allow single family homes to be built easier and provide grants like for an owner occupied house? It doesn't have to just be on the investment side. I don't think we can go there.


00:33:57 Taylor Atkinson
Perfect. I was trying to strike a chord all day. Yeah. Well, let's stay on topic with CMHC, where vacancy rates are, rental construction. Like we touched on it a little bit, but that is one of the topics here. So one of the shows, which was again, an awesome show when we had you on 20 episodes ago, like there was about, I think 5 ,000 units. Yeah. you know, built or at least scheduled to. Vacancy rates you're predicting to rise, which obviously CMHC came out with their data recently, which it has. What's going on now?


00:34:27 Jeff Hancock
Yeah. I mean, I think the vacancy rate that CMHC is now espousing, I think is low as rear view mirror thinking. I think really you're probably sitting around 9%. It's important though to say like, you know, this was the intention, right? The intention was to increase the vacancy rate to a healthy place where renters, you know, have choice and we can plateau value on rents and, or even, you know, bring those down a bit to make things more affordable. So all the success to, you know, the province, to the feds and to the city, you know, they've been able to achieve that goal. but you know now what you're going to see you know which is typical is that you know developers aren't going to be building any more of this product right now just because again there's just too much risk and it's really tough to make the numbers work with a nine percent vacancy carry or with rent stabilizing or even you know dropping so the 5 000 units plus that were coming to market a lot of that has hit the market there is still some to hit and i think once that inventory is completed and is in the market and available you're not going to see another purposeful rental building built for a few years but you know rents are coming down which is great and it giving people choice but i think that that product type is going to be hard for guys to rationalize and build so i don't think rents will come down as much as people


00:35:38 Shane Styles
don't think rents will come down as much as people would like them to or expect them to because what i said earlier that inflation component It just costs so much to build. 100%. I was looking at rentals .ca and the rents were still up. They have come off a bit. They've come off a bit, but they haven't come off a lot.


00:35:54 Jeff Hancock
No, not a lot. What's happening though is you're not seeing the face rate come off, but you are seeing incentives offered. So it's three months free rent. When you start building all that into what the actual, you know, the number that somebody's paying, it is lower for sure. I agree with you, Shane. Like the cost to construct is X and, you know, developers aren't going to drop their prices. you know, they're going to try not to drop their prices below the point where they're losing money, obviously. So yeah, I think rents are going to be sticky. They always kind of are, but I do feel they're going to trend down a little bit within nine or 10 % vacancy. That's going to happen. Absolutely.


00:36:26 Taylor Atkinson
Well, that's a perfect segue to short -term rentals. Cause obviously we talked about city of Kelowna is omitting or going to the province to go through that process. And that's due to vacancy. Say they're pushing to get it earlier. Yeah.


00:36:39 Shane Styles
Yeah. What is the timeline, Matt? Remind me.


00:36:42 Matt Glen
I think fall is when the next time when they can come down, but they're trying to do it like in the next couple of months.


00:36:46 Jeff Hancock
Yeah, because they want to capture the summer season, right? Here's a question I have.


00:36:48 Matt Glen
a question I have. Why can't they do it in a month?


00:36:50 Jeff Hancock
a month? Well, did you see the housing minister? They don't even have it fully thought through. She came right out and said, you know what? Yeah, we're looking at Kelowna. They're the first group that wants to opt out, but we haven't done it before and we're not really sure how that works. That is a quote from the housing minister. They're not even sure how they would back that policy out.


00:37:09 Taylor Atkinson
So they can opt in very quickly. But it's a good question. I was speaking with Dina Steele. Keys to Kelowna. She's an awesome guest. And that was a funny thing. We were at kind of like a little round table for Airbnb people. And someone brought up like, well, yeah, like we're pretty positive that we could, you know, expedite this and, you know, be good for the summer. And she was like, why on earth would the province let Kelowna do this first? No other municipality has been allowed. You know, it's a great thought. And like, we're all optimistic that it could happen. And Kelowna is Kelowna specific. Really, why would the province make that exception for us? Yeah, well, that might be too progressive for them.


00:37:44 Jeff Hancock
I think, though, that the city, like kudos to city staff planning, as well as to mayor and council, like they're pushing pretty hard. They recognize, you know, the importance of being able to offer short -term rentals in this city. We are a tourist economy in a lot of ways. And, you know, I think they felt the pain when we opted out. They had a goal in mind and, you know, we've obviously surpassed that goal when it comes to a vacancy. rate that they were targeting. Anything quicker, obviously quicker. Yeah, exactly. But again, I've said this in the past and I've had this conversation in the past, but it has nothing to do with the short -term rental. We just talked about it. It was the massive amount of purpose -built rental supply that the federal government supported through their financing mechanisms. That's what caused the vacancy rate to go up. It had nothing to do with the short -term rental. you know market and the province is trying to say that it does and they're trying to conflate the two but it just happened to coincide in terms of timing right that was all it is and you watch when they reinstate short -term rentals and yeah it's going to be a little bit different in terms of being more targeted but the vacancy rate's not all of a sudden going to go down right like that there are not a lot of short -term rental condos that convert well to long the curve back tools the value is not there and vice versa people are not renting out a 400 000 condo on airbnb because it's just that's where people lose change the rules yeah it has a tenant like we all know what it's like to get a tenant out yeah impossible so like it's not like years down the road it's not gonna be immediate yeah exactly so even if law changes yeah this afternoon this summer is basically a write -off so it's funny though like we're talking about all these rule changes but


00:38:46 Taylor Atkinson
there are not a lot of short -term rental condos that convert well to long the curve back tools the value is not there and vice versa people are not renting out a 400 000 condo on airbnb because it's just that's where people lose change the rules yeah it


00:38:59 Matt Glen
has a tenant like we all know what it's like to get a tenant out yeah impossible so like it's not like years down the road it's not gonna be immediate yeah exactly so even if law changes yeah this afternoon this summer is basically a write -off so it's funny though like we're talking about all these rule changes but One thing that the realtors have done is create a lot of content with this podcast.


00:39:17 Taylor Atkinson
Every week. Yeah. Yeah. We keep dropping the government, these crazy ideas and they take them and the podcast is blown. Um, okay. So to wrap this up, 2026. Yeah. Any other predictions, any other grievances? That's what we were going to do.


00:39:33 Shane Styles
what we were going to do. We were going to have the airing of the grievances. We're going to take a. You know, a Seinfeld approach to the end of the podcast. I know you've been waiting all 45 minutes for this.


00:39:42 Taylor Atkinson
So have at it. You guys might have to go first because I've got so many.


00:39:46 Matt Glen
I've got to pick. Well, so I'll go first. My biggest grievance is just the lever pulling. it's like something's wrong and you just pull every possible lever and then just swings this way and then like you pull all the levers back and it swings this way we just talked about like our vacancy rate was really low it's like we need to get it up so let's just do absolutely everything possible to make it high then now it's just skyrocketing now we need exemptions to bring it back down to normal pace faster it's just like holy just to pull one lever at a time let her see what happens here Can't agree more,


00:40:12 Jeff Hancock
agree more, Matt. That's my major grievance. And it's very specific, the provincial government. I think I've done an absolutely terrible job in terms of housing, some of the asinine. You know, all the seeds that they have in place and the things that they do, they're just, they're so out to lunch. I could go on forever, but it drives me absolutely phasing. So that is definitely my biggest greed is the provincial government.


00:40:32 Taylor Atkinson
Yeah. I mean, you guys took the easy one. There's nothing else left really, but a little spinoff on that is I totally agree. I think my frustration has been in the past with the provincial government is the headlines. It's like. Great media post. Hey, GST rebate. And it kind of hypes everyone up, but we don't know exactly how it works. Is there an exemption rebate who qualifies? And then they change it and change it. So, you know, it could range from anything they've been. advocating for. Same with, you know, first time home buyer grants, sliding scale on property transfer tax exemptions, like just. Poorly thought. Stop coming up with like the media headline and actually come out and execute it. Insured, you know, mortgages million to a million and a half. Like all these things are great, but just like come out and do it properly and execute and stop having like a bunch of fine print with nuances that at the end of the day, it's a nothing burger. Like just do what you're trying to do on the headline and that would be mine. Yeah. Okay, I'll pick one.


00:41:28 Shane Styles
You know, housing attainability, affordability is directly tied to how much you make and how much you take home. My beef is I'm not hearing enough at the municipal, provincial, and federal level about how we're going to create really great jobs that pay really well and lower people's taxes. Because you're not going to change the cost of construction that much. The cost are the cost. They're established. Okay. And interest rates, you know, prediction 2026 flat.


00:42:03 Shane Styles
And I think maybe a little lower at the end of the year, most predictions have been, they're going to be flat for the entire year. I think they're going to come down a little bit at the end of the year personally, but they're pretty much stable. So where can you make a change? It's how much money you're bringing home and how much they're leaving you with and the amount of tax we pay. And the ability to create good jobs, we need good, solid paying jobs. And I'm not hearing that. Yeah, we're in housing and development and that sort of thing. And we always pay attention to that. But it's the people that rely on housing are all those professions. That's my beef. I want to hear more about that. I was just at the UDI mayor's conference. It was great. All the mayors were fantastic. None of them talked about how they're going to create job growth in their community.


00:42:49 Matt Glen
So I agree with that totally. And to the point about construction costs not coming down, I have a funny anecdote about this, is that on our podcast, we had a guest on that was talking about how costs are not coming down, they're getting more expensive, and that construction sites now have to have flushable toilets on the construction site. So on our podcast, we laughed about it, made a joke about it. I start getting messages from construction workers being like, you're not taking away our fucking... flushable toilets on the construction site. I just thought this would be a hilarious thing that everybody would agree with that is crazy and it's costing a lot of money. It is not. Those destruction workers are not giving up their flushable toilets. So my point about this is construction costs are not coming down. They're fixed, right? They're going to stay the same. Yeah. If your point, that has to be the wages.


00:43:29 Shane Styles
The cost of that flushable toilet, we can keep that in. There's so many other costs that are born that aren't toilets that we could change. There's another angle to this. And I was talking to a local politician. They'll be nameless because I don't want them to know that I shared this. And he said something that I thought was really, really astute. He said, you know, why can't we just, if we need to build a new road and it's kind of in a bit of a semi -urban rural place, why can't we just have a gravel swale? Like, why does it need full curb, gutter? In other words, let's keep the cost reasonable. You know, I was just down at the end of Sarsons here and I noticed a change. All this concrete. that's been poured on every corner at Sarsen's beach, that intersection there. I've never seen that before. Stop signs, concrete barriers. I'm like, haven't seen it. I'm like, since when did Sarsen's get so dangerous? So I just see this and I'm like, I think we're not spending money in the right places. Yeah. Yeah. You know, I think actually a really good toilet for a construction worker is a good thing. I think it's actually a good place to spend money.


00:44:37 Shane Styles
I know, but I believe it. I absolutely think it does. I've got my buildings, like if I build a home. I don't know.


00:44:41 Taylor Atkinson
don't know. Only Matt and I came from trades. We're like, I don't know. They're going to have more respect for that house when they go and build it. And that's what we wanted to deliver as a better home.


00:44:48 Shane Styles
wanted to deliver as a better home.


00:44:49 Jeff Hancock
I think it's more like step code and building code. Like just the layers of, you know, some of the, you know, the things that are doubling, tripling up on certain things. Like just that kind of stuff. There's so much. you know, fat in a lot of these regulations.


00:45:02 Matt Glen
So, okay, I have another Iowa's own story. I'm working on my basement suite. I'm building a basic space house. It is like literally cities have been built faster than my basements. It is going so slow. But one of the things, I have a furnace. I have an electric heat pump, super nice one in my house, heated the basement. City Inspector says you have to come, you have to take out, you have to plug all the ducts, 5 -inch drywall over it, put in baseboard heating and a new heat pump to do the heater. But then because that place is now not vented because we just blocked all the ducts, I have to put in a venting system that's not heating or cooling. Another venting system cost me like 15 grand. Now my place is actually worse because it has baseboard heating when it had a heat pump before. It's crazy. It cost me like so much money, so much time. And we actually have a worse product downstairs. It's just a perfect example of that.


00:45:46 Jeff Hancock
asinine, backwards thinking, like just two sides of things just not speaking to each other. It's just crazy. People wonder why are things so unaffordable? Why is it so hard to... Like I'm doing this and then I come talking to this podcast about every single episode is housing is too expensive.


00:45:53 Matt Glen
hard to... Like I'm doing this and then I come talking to this podcast about every single episode is housing is too expensive. It's just like these stupid things are why.


00:46:00 Taylor Atkinson
why. It's fine to come up with like the step code stuff, the toilets at construction site, the extra sidewalks. You can build anything you want as long as our economy can support it. and our economy cannot right now. That's the issue, right? Like some of these ideas aren't the worst ideas, but like we do not have the financial stability to actually execute them. So why do that right now?


00:46:21 Jeff Hancock
Like focus on the need. It's a wish list of some bureaucrat, right? That doesn't truly understand how that affects things down the road, right? And how it affects the actual, you know, building of things. And that's what's so frustrating.


00:46:32 Shane Styles
What, because it creates a great headline that will lead to votes?


00:46:36 Taylor Atkinson
lead to votes? There you go. A hundred percent. You know, we don't want to leave the podcast on like a negative note. Not that this is negative, it's just realistic, but a positive spin. Where can people find out more about Tradecraft, connect with you guys?


00:46:48 Jeff Hancock
Our website is a great place to start, or you can always just pick up the phone and give Shane and myself a call. We're always happy to chat, even if it's just about, you know, our thoughts on the market or, you know, more information around what we do and how we can help and add value. Shane and I are both, you know, pretty happy to have a conversation with anybody that wants to chat.


00:47:06 Shane Styles
Yeah, I think, you know, actually LinkedIn, it's probably really the only social that we're both on. And we actually just got a new mandate from a great client. Here's the situation. They've got a market for sale condominium project. They started it in 2022. They sold 60 % of their inventory. They did one sale in 2025. They need a solution. And they found us through LinkedIn. They found us through a post that Kayla had created talking about how we help developers in that space. So we're always easy on LinkedIn to get us. You can find us, just type our names in. And I respond to messages often quicker on LinkedIn than I do on my own emails. So.


00:47:40 Taylor Atkinson
I would like to say on that note, this is the first podcast we've had five people. Kayla is here as well. Her LinkedIn posts are awesome.


00:47:48 Matt Glen
Thank you. Kayla, this is a paper start.


00:47:50 Taylor Atkinson
Yeah.


00:47:51 Matt Glen
Also, yeah, it's been great as usual to both. And yeah, thanks for having us back guys. I appreciate it. Very good. 2026.


00:47:58 Taylor Atkinson
Yeah. And then when we come back on in 2027, it's going to be nothing but just like. Yeah, exactly. Yeah. Okay, thanks guys. Thank you. Take care.