Many Albertans have flocked to the Okanagan, but the downturn in oil prices has led to a drop in sales.

Photograph by: File photo. Brian Sprout for the Province

A booming Okanagan real estate market powered in part by buyers from oil-rich Alberta is now sputtering in the face of the downturn in the Canadian oilpatch.

While the B.C. Real Estate Association is forecasting increased home sales for most of B.C. sales in the Okanagan and the Kootenays are expected to decrease 7.5 per cent for the first quarter of 2015, largely because of low energy prices and Alberta’s flailing economy.

“Recreational buyers from Alberta will likely not be as plentiful this year,” said chief economist Cameron Muir. “Many potential buyers will likely sit on the fence. waiting for economic conditions to improve.”

Muir characterized the decline as a “temporary, modest pullback,” especially compared to last year when property sales in the Okanagan shot up by 25 per cent.

The region has long been a playground for wealthy Albertans drawn by its dry climate, beaches, lakes, wineries and golf courses, as well as easy plane connections from regional hubs Penticton and Kelowna to Calgary.

According to the Okanagan Mainline Real Estate Board, about 17 per cent of buyers who purchased property in the first half of 2014 hailed from Alberta, more than the nine per cent from the Lower Mainland and Vancouver Island.

The OMREB, which covers the Okanagan region from Peachland to Revelstoke, saw a 15-per-cent decline in all property sales last month compared to the same time last year, from 394 units to 334.

Demand typically slows in January, said president Darcy Griffiths in a February report, but “the additional slowdown can be attributed to the record snow falls blanketing our (area) as the New Year began, and the downturn in the Alberta oilpatch negatively impacting consumer confidence.”

The North Okanagan experienced the largest drop of nearly 29 per cent in overall sales, followed by the Shuswap region where sales declined by 23 per cent. The central zone, which spans Peachland to Lake Country, was down about seven per cent.

Muir said it’s not just Albertans who feel the effect of the oil-boom slowdown. British Columbians who work in Alberta’s oil and gas sector while maintaining residences in the Okanagan, Kootenays or northern B.C. will also be affected.

But there are countervailing pressures. The weak Canadian dollar and low lending rates could encourage property buyers. As well, some Albertans nearing or in their retirement years may choose this time to cash out and come to B.C. said Muir.

“That overarching demographic of aging Canadians who tend to like to retire in warmer climes is going to continue,” he said. “B.C. is still a strong draw.”

Muir does not foresee the real estate slowdown to last past the year. The real estate board forecasts a two- to 3.6-per-cent increase for the Kootenays and the Okanagan, respectively, in the first quarter of 2016.