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Kelowna's rental market dries up
Things are looking up in Kelowna, unless you’re a renter.
The Canadian Mortgage and Housing Corporation released its annual Market Survey, highlighting that Kelowna is one of the most difficult places in the country to find rental accommodation.
The rental rate dropped from 4.8 per cent in April 2013, to 1.5 per cent April 2014.
“There are a number of factors that explain why the vacancy rate moved lower,” said Paul Fabri, market analyst with the Kelowna office of CMHC.
University enrolment rates have gone up and that’s brought more residents to the valley.
In the last year fewer new, purpose-built rental buildings have come on stream.
Also, the employment rate for the first five months of the year showed an uptick, which means there may be more people looking for homes in the area.
The most pronounced change, however, is likely due to a rebounding real estate market.
“The MLS home market has picked up and there have been increased sales of apartment condos.”
That’s likely come as a relief to the previously high number of Kelowna condo owners, who initially saw real estate as an investment. When the market plunged in 2008, the expectation of easy-returns was dashed.
As they had to wait out the market flop, renters suddenly had a lot of selection and prices dropped.
Of course, that sets off the second round of bad news for renters.
“Average rents did edge higher, not a big increase. Overall the increase in average rent was measured at 0.7 per cent,” said Fabri.
Nationally, things were much more stable.
The average vacancy rate for primary purpose-built apartments in Canada’s 35 major centres was 2.7 per cent in April 2014, unchanged from April 2013.
“The stability of the national vacancy rate is due to supply and demand factors,” said Bruno Duhamel, manager of Economic and Housing Analysis. “Demand for rental housing continues to be supported by population gains from net migration and stable employment levels for young workers aged 20 to 24”.
The Canadian average two-bedroom rent in new and existing structures was $930 in April 2014.