2017 OKANAGAN VANTAGE REPORT
I
Q3/Q4
t was a highly competitive year for investors looking for prop-
erties with high rates of return. Most decent rentals that were
listed didn’t stay on the market long and small, multi-family units saw big price gains. In all of the Central Okanagan, there were less than 50 multi-family properties sold. Of these properties, 26 were duplexes, and another 16 were fourplexes. Less than 5 apartment build-
AS THESE RENTAL PROPERTIES COME ONTO THE MARKET, WE EXPECT TO SEE VACANCY RATE INCREASE A LITTLE
ings in the region changed hands. And why would anyone sell when it’s
Landlords would do well to consider making upgrades to their properties now
such a great time to be a landlord in the
before newer, amenity-rich units offer consumers better options.
greater Okanagan. The tech sector and
For many people who have been waiting to save up for a down-payment on
University attract young renters and
a home, the wait will take a bit longer starting this month. The new mortgage
seniors make up over 20% of people
stress-test begins to take effect this month. For many, these new rules will have
living in Kelowna. The rental vacancy
the unintended consequence of keeping would be homeowners in the rental
rate this past year was well below 1%,
market. Unfortunately, as future buyers continue to put money away, the aver-
and rents in the Okanagan have risen
age sales price creeps steadily higher.
steadily. Older apartment buildings can be acquired for
IT’S A GREAT TIME TO BE A LANDLORD IN THE OKANAGAN
5-BEDROOM HOMES W/ SUITES, AVERAGE SALE PRICE 800K
600K
$85-90K per door, and Kelowna’s Rental Housing Grants program disburses $320,000 annually to encourage the
500K
construction of purpose-built rental housing. The Grant program appears to be having
400K 2012
2013
2014
2015
2016
2017
some effect as we’ve seen an increase in rental stock building permits. Many
Data Source: OMREB - Average annual sale price, January 2012 - June 2017.
of the 1 and 2-bedroom units that will be constructed this year fall under the affordable housing initiatives that the municipality laid out back in 2016. Significant incentives were offered to developers for building affordable units. As these rental properties come onto the market in the next 12 months, we expect to see the vacancy rate increase a little
THE RENTAL VACANCY RATE THIS PAST YEAR WAS WELL BELOW1%
which will give some relief to renters. 2017 OKANAGAN VANTAGE REPORT • 17