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Kelowna's rental supply starting to dwindle
Finding a rental home may be a bit more challenging than it's been in the last couple of years, according to a new report released by the Canadian Mortgage and Housing Corporation.
Numbers released Thursday show that the vacancy rate for apartments in this part of the valley were at 1.8 per cent this October, compared to four per cent the year before.
Similarly, availability rates dropped from 4.5 per cent in October 2012 to 2.7 per cent this year.
That shrinking supply has pushed the cost of housing up this year over last year as well. The average rent for a two bedroom apartment October last year was $927, and it's now around the $970 mark.
So, what caused the change?
Paul Fabri, a CMHC market analyst, says there are a few factors that are having an impact.
First off, there were fewer additions to the rental building stock in 2013, compared to 2011 and 2012.
Fewer new structures amount to less options for renters.
There's also competition for rentals from buyers.
When the investor market tanked a few years ago, many of the condos in Kelowna were left empty and rented out, lessening the pressure on the purpose-built rental supply.
A recent uptick in sales by people who actually want to live in the condo they own may have dried up that avenue of rental housing.
"We have no solid numbers on that," Fabri added, noting another factor may be more relevant to the change.
"There's been rising student enrolment (and UBC Okanagan)," he said.
Student residences were built in 2011 at the same time student enrolment increased, but the new on site buildings don't accommodate the bulge in student population.
Now many students are in need of off campus housing, soaking up a lot of the supply.
Finally, the returning health of the economy through increasing job numbers combined with last year's stable rental rates likely gave some a chance to change their lifestyle.
While these conditions may have halved the rental availability rate, and reflect a stronger local economy, Fabri doesn't think that the city will head into the conditions of the mid 2000s, when rental opportunities were virtually non-existent.
"Then there were higher levels of in migration, and the economy was growing faster," he said.
"Now we're seeing some improvement, but it's not likely we will see vacancy quite that low in the short term."