Photo: City of Kelowna
A global pandemic was expected and the associated shutdowns and lockdowns would have a negative impact on the high-priced Kelowna real estate market.
Exactly the opposite is the case.
The city has fared better than most in both BC and across the country, making the price of home ownership and rent even higher than in 2019.
Much of the increase has to do with growth and employment.
As part of his annual housing report, policy and planning manager Ross Soward told Kelowna council that he had one of the highest growth rates in the country, largely due to inter-provincial migration, while also having one of the lowest unemployment rates.
“Kelowna is doing better than other regions,” he said.
In fact, Kelowna still had higher total employment at the end of 2020 than at the end of 2019, despite heavily impacted sectors such as food and lodging, recreation, culture and the airport.
“We experienced a slight boom in the real estate market in the second half of last year,” said Soward.
And while condominium sales still held the highest market share in sales, the strongest demand was for floor-facing living.
“Single-family homes and townhouses are up nearly 8 percent. Average single-family home price about $ 735,000 at year-end.”
Due to COVID-19, Soward said people are spending more time at home and looking for a home with more space by working remotely. Record lows and an influx of people entering the market also contributed.
Despite the market shift, planner Arlene Janousek says that most of the apartments that are either under construction or in the development pipeline are apartment buildings. This corresponds to around 85 percent of the 9,200 units expected to be built over the next four years.
In terms of rents, Janousek says the city is not keeping up with demand, which is reflected in a vacancy rate from 2.7 percent to 2.1 percent.
“Even after several years with record levels in residential construction, we still see strong demand for rental apartments in 2020,” said Janousek.
She says there aren’t enough affordable and subsidized rental units to serve lower-income residents who are hardest hit by COVID-19.
It’s a trend that upsets Coun. Ryan Donn.
“Our range of apartments and rentals … we are becoming less and less of an affordable city,” said Donn.
“It is becoming less and less affordable to live in Kelowna and I have actually joined the council to correct that.
“It’s unfortunate that we’re leaning in the wrong direction. It would be great to see much cheaper places for people because I think we worked very hard on it.”
As the numbers slide in the wrong direction, Coun. Luke Stack wondered how bad they would have been if the city hadn’t incentivized purpose-built housing.
“I really shudder when I see where we would be as a city. We didn’t build rental apartments a few years ago,” said Stack.
“We’re seeing a huge amount now, and I’m amazed at how quickly the numbers we have built can take on.”
