Rent passes $1,000
Trevor Nichols - Feb 17, 2017 - Biz Releases

Photo: Contributed

Rental rates in Kelowna jumped to more than $1,000 per month in February, and there’s no guarantee they’re going to get better.

According to the PadMapper Canadian Rent Report Kelowna is now the eighth most expensive city in Canada for renters, with the average one-bedroom apartment costing $1,020 a month.

That marks the first time the average rental price in the city has eclipsed $1,000.

James McCullough, a licensed property manager with Kendall Property Management, explains that rental prices in Kelowna follow the same supply and demand trends as just about everywhere else.

A limited supply of available units causes rates to rise, and those rates will only go down when more units become available.

Kelowna City Council has been pushing hard for new residential developments, approving more than 1,000 units of new housing, which will be completed over the next year or so.

McCullough says even though council is “doing its best” to get more units built, those 1,000 units alone won’t be enough to permanently fix the city’s rental crisis.

He says rental rates will likely drop after those buildings are finished, but will climb right back up again unless there is “continuous development” of rental properties in the city.

Development needs to stay ahead of population growth to keep the rents affordable for tenants, but high enough to encourage further development, he says.

And that development can’t be limited to just condo buildings.

McCullogh says there needs to be further incentives for people to build carriage houses, basement suites, duplexes and fourplexes in place of older single homes and other urban development.  

He points to Denver, Colorado as a prime example of what needs to happen.

In 2011 that city faced warnings about a potential rental shortage, so its council “opened the floodgates” on development, resulting in better vacancy rates in the city, which in turn lowered rental rates.

McCullough says that while vacancy rates in the Kelowna will likely go down temporarily after all the new units are built, it’s “difficult to say” for how long, or by how much, since the city continues its impressive growth.

Last year the number of units in Denver increased by about 10 per cent, which McCullough says bumped up its vacancy rate by 1 per cent. Drawing a rough comparison with Kelowna, he says our city’s 1,000 new units “should bump the vacancy rate by a point or two.”

He reiterated, however, that the bump would only be temporary.

“The city is going to have to keep building more or we will end up in our current situation again within five years,” he said.


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