A crash in the value of development applications in Kelowna last year has flipped, according to a new report to council by City of Kelowna director of planning and development services, Ryan Smith. (Phil McLachlan - Capital News/FILE)

A crash in the value of development applications in Kelowna last year has flipped, according to a new report to council by City of Kelowna director of planning and development services, Ryan Smith. (Phil McLachlan - Capital News/FILE)

Value of Kelowna developments now skyrocketing following 2020 crash

A crash in the value of development applications in Kelowna last year has flipped

Uncertainty due to COVID-19 had a large effect on new developments in Kelowna last year.

However, this downward trend has flipped heading into 2021.

This is according to a report prepared for council by City of Kelowna director of planning and development services, Ryan Smith.

His report, which will be presented to council Monday (Feb.22), explains that low-risk construction was the theme in 2020.

Last year the city saw far less large multi-family homes, commercial and industrial projects take shape. However, single family unit projects were almost unaffected by COVID-19 uncertainty.

Although the number of permits issued in Kelowna last year wavered by less than 10 per cent, it was the total value of applications that crashed by 50 per cent — from roughly $900 million in 2019, to roughly $500 million in 2020.

“The value of permits and new residential units was down roughly 50 per cent compared to the previous year. But at the same time, the total number of building permits was at 93 per cent of the total BPs issued the previous year,” states Smith.

Some projects, Smith explained, were paused due to the COVID-19 shutdown.

In 2020, the number of housing units dropped significantly across the board; 1,096 units constructed, less than half the five-year average. The construction of apartment units last year saw the largest decrease, just 30 per cent of the five-year average.

However, this downturn hasn’t carried into the new year. In fact, it’s been quite the opposite. December, January and February 2021 have carried with them a surge in development applications — much higher than average.

“While (in) a typical January staff expect to see gross permit value of around $50 million, January 2021 had a gross permit value of $144 million.”

Furthermore, in the first 10 days of February, staff received permits with a gross value of over $319 million. This is leagues higher than the average $28 to 40 million for this period.

Going forward, Smith expects that consumer demand in the area will remain high. Also, Smith predicts a further rush of projects in 2021, including several large-scale developments. He also expects “pent up” demand in the market could lead to higher prices going forward.

Do you have something to add to this story, or something else we should report on? Email: phil.mclachlan@kelownacapnews.com


 

@newspaperphil
Like us on Facebook and follow us on Twitter.

development