Osoyoos

Lending in Osoyoos

Osoyoos isn’t your typical BC town. It’s set in Canada’s only desert, a distinct landscape that defines its economy and real estate market. The appeal is obvious: hot, dry summers, mild winters, and the warmest freshwater lake in the country. This isn’t a resource town or a bedroom community; it’s a destination, driven by tourism, agriculture—mostly vineyards—and a powerful retiree demographic.

You can’t talk about the economy here without understanding the influence of the Osoyoos Indian Band (OIB). They aren’t just a cultural presence; they are a primary economic engine. Through major enterprises like the Nk’Mip Desert Cultural Centre, Spirit Ridge Resort, and various wineries, the OIB has built a sustainable business ecosystem. As Chief Clarence Louie puts it, “We are Business People, we have always been business people.” This provides a layer of stability to the tourism sector that’s often missing in other resort towns.

The numbers paint a clear picture of the market. With a median age of 63.2, Osoyoos is fundamentally a retirement community. The population of seniors (65+) is 46.3%, virtually equal to the entire working-age population (15-64) of 46.1%. This age structure is both a strength and a risk from a lending perspective. The strength is a consistent demand from equity-rich downsizers and vacation home buyers from across the country. This creates a resilient floor for property values and supports quick resale potential, a critical factor in our risk assessment. Even in a market downturn, there’s a line-up of people waiting to retire here.

The risk lies in the local economy. A median household income of $66,000 and an unemployment rate of 11.7% means we aren’t banking on strong local employment to service debt. The top industries are retail, hospitality, and healthcare—sectors not known for high wages. The economy is fueled by external wealth arriving with new residents and seasonal tourists, not by high-paying local jobs.

This split between strong asset values and weak local incomes is exactly why we lend in Osoyoos, but with a disciplined approach. The strong, predictable demand from retirees provides an excellent backstop for asset recovery. However, the soft local income metrics mean we have to be conservative. This is an equity play, plain and simple. We’re comfortable with the asset class, especially since single-family homes, duplexes, and low-rise apartments make up over 85% of the local housing stock. Our focus is on the property’s inherent value and marketability. For these reasons, our maximum LTV in Osoyoos is 65.0%. We see good opportunities here for bridge loans, debt consolidation for established residents, and equity take-outs, provided the numbers make sense and the exit strategy is clear.