In another sign that Kelowna’s economy is struggling, the region’s apartment vacancy rate is now the highest in Canada.
The Central Okanagan has a rental vacancy rate of 6.4 per cent, the Canada Mortgage and Housing Corporation reports, up significantly from last year’s rate of 3.8 per cent.
Calgary has Canada’s second-highest apartment vacancy rate, at five per cent. The national average for Canada’s biggest cities is 3.1 per cent, up from 2.2 per cent last year.
Vancouver’s apartment vacancy rate is 3.7 per cent, the highest level since 1988.
More than eight per cent of Kelowna’s one-bedroom apartments are empty, while the vacancy rate to two-bedrooms is 5.2 per cent.
Key factors nationally for the increase in empty apartments in most Canadian cities is said by CMHC to include reduced immigration that lessened demand, as well as slower hiring and rising unemployment.
The second condition is particularly acute in Kelowna, which now has Canada’s highest jobless rate at 11 per cent, which means 16,200 people in the Central Okanagan are looking for work. Enrolment at Kelowna-area schools also declined this fall for the first time in a decade.
Gavin Dew, the BC Conservative MLA for Kelowna-MIssion, said the fact the region has both the country’s highest apartment vacancy rate and its highest jobless rate illustrates the region’s faltering economy.
“Those are worrisome indicators of our overall economic health,” Dew said. “The folks in government town Victoria may not get it, but out here in the rest of the province we have serious challenges and we need balanced solutions to rebuild economic confidence.”
From January through October, the City of Kelowna issued 1,433 building permits worth $969 million. While that was up from $553 million through the same period last year, it’s below the annual average of $1.23 million in the years 2021, 2022, and 2023.
Just 106 new single-family homes have been built so far this year in Kelowna.
With two consecutive years of apartment vacancy rates above the three per cent level, Kelowna can relax its rules against short-term rental units, per the NDP government’s policies. That’s expected to help more homeowners make their mortgage payments while also offering tourists an alternative to high-priced hotel rooms.
But even if city officials act swiftly to make an exemption request, the current approval timeline extends to the fall, past the lucrative summertime tourist season. The city says it hopes to get an earlier approval to lift restrictions against short-term rentals.