More apartments for rent, but at higher cost

Vacancy rate climbs from 0.6% to 2.7%

It’s getting easier — but also more costly — to find a place to rent in Kelowna.

Thanks to a flurry of construction projects, there are more rental apartments in the city than ever before. But while vacancy rates have increased from historic lows, rents have climbed steadily during the past three years.

Data released Wednesday by Canada Mortgage and Housing Corporation paints a mixed picture of the rental situation in Kelowna.

As of October 2019, there were 6,650 private apartment units in the city, up more than 2,000 from October 2016. The greatest increase, of about 900 new units, was in two-bedroom units.

With all the new units coming on stream, the vacancy rate has climbed from 0.6% in October 2016 to 2.7% last fall.

The additional supply has not moderated rents, however. During the past three years, the average monthly rent for all types of rental units has climbed from $976 to $1,222.

Rents for bachelor suites have risen from $710 to $968; one-bedroom units have increased from $864 to $1,095; and the rent for a two-bedroom unit has climbed from $1,066 to $1,385.

The figures for Kelowna from CMHC include the surrounding municipalities of West Kelowna, Lake Country and Peachland.

To spur the construction of purpose-built rental complexes, the City of Kelowna offers developers incentives like reduced taxes and a reduction of municipally collected development cost charges.

In the Penticton area, the total number of private apartment units has also increased during the past three years, from 2,063 to 2,307. During that period, rental vacancy rates have climbed from 1.1% to 1.9%.

The average monthly rent for all types of apartments in the Penticton area last fall was $1,018, up from $800 in October 2016.