New multi-unit construction project at Central Green development in Kelowna. Photo: Contributed/VanMar Contractors

Positive signs for Kelowna, Vernon home construction markets

CMHC analysis finds markets shifting to meet different price, rental vacancy demands

A fall-off in inter-provincial migration and the anticipated provincial speculation tax are two factors taking some steam out of the Okanagan housing market.

But an analysis done by Central Mortgage and Housing Corporation for Vernon, Kelowna, Prince George and Kamloops still finds some positive new home construction indicators.

Kelowna continues to see a sharp rise in multi-unit residential construction, while both Vernon and Prince George continue to see new home construction growth while attached home construction in Kamloops has increased 10-fold over last year.

Related: Okanagan real estate sales slump continues

Taylor Pardy, analyst for CMHC, says Vernon housing construction looks to double over last year, as 2018 comes in the wake of equally strong years in 2017 and 2016.

“Vernon has seen, up to July, 60 new housing starts come on stream compared to 31 last year, so that is quite significant, and overall for the first seven months of 2018, there have been 279 housing (single, semi-detached, row and apartment) starts compared to 177 last year. So overall, Vernon is seeing a fair amount of building activity in the housing market this year,” Pardy said.

Kelowna has hit a bit of a lull in new-home construction after some recent robust years, but the slack has been taken up by builders turning to multi-unit construction opportunities.

“It was a record year for new home construction in Kelowna last year, and 56 per cent of that was related to the multi-unit rental market,” Pardy said.

“That definitely speaks to the fact the vacancy rate has been so low the last three years, but builders are now choosing to build in the rental market as the rental cash flow for those projects has become a little more attractive.”

Pardy said the drop-off in inter-provincial migration, such as prairie province residents retiring to the Okanagan or choosing to live here and commute to where they work, as having a significant impact on the Central Okanagan housing market.

“I think that is a reflection of a bit of an economic slowdown, particularly in Alberta, and that has a residual affect on housing demand and prices ultimately,” he said.

“When that migration softens a bit, it tends to be reflected in B.C. Interior centres above the 10,000 population mark.”

The speculation tax right now, he said, is more about policy shock anticipated for a new provincial revenue generating directive that has yet to be implemented.

“It’s a bit difficult right now to assess that policy shock. We will have to wait and see what happens with that tax once it is implemented,” he added.

The tax is due to be adopted this fall directly impacting Kelowna and West Kelowna, but no other Okanagan markets.

West Kelowna Mayor Doug Findlater has been a vocal critic of the tax. He along with Kelowna Mayor Colin Basran met with Premier John Horgan earlier this summer on the issue, but so far there is no indication either community will get a reprieve from being part of a speculation tax zone, joining the Lower Mainland and southern Vancouver Island.

To report a typo, email: edit@kelownacapnews.com.


@BarryGerding
barry.gerding@blackpress.ca

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

‘Perfect storm’ causes influx of black widows in the Okanagan

The region’s only venomous spider has come out in full force this year

Stanley Cup within Vernon man’s reach

Dennis Holland has spent the past 18 years scouting for the Dallas Stars, seeking his first Cup ring

Spotlight on Syilx culture in new Vernon Winter Carnival project

Grant funds launch new project, provides skills training for Indigenous youth

Suspected human remains found in burned out vehicle on OKIB land

Vernon North Okanagan RCMP hand over investigation to Major Crimes

Fuel Good Day pumps up North Okanagan-Shuswap charities

Cheques for more than $2,500 handed over to three organizations in annual fundraiser

B.C. reports 96 new COVID-19 cases, one hospital outbreak

61 people in hospital as summer ends with election

Attorney General defends Kelowna Mountie involved in rough arrest

Tyler Russell filed a lawsuit against Const. Siggy Pietrzak in June of this year

‘Unprecedented’ coalition demands end to B.C. salmon farms

First Nations, commercial fishermen among group calling for action on Cohen recommendations

Earthquake off coast of Washington recorded at 4.1 magnitude

The quake was recorded at a depth of 10 kilometres

B.C.’s top doctor says she’s received abuse, death threats during COVID-19 response

Henry has become a national figure during her time leading B.C.’s response to the COVID-19 pandemic

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Kamloops RCMP search for armed robber of pizza restaurant

The incident unfolded on Monday evening at the Sahali Domino’s store

BC Liberals must change gears from election cynicism, focus on the issues: UBC professors

COVID-19 response and recovery is likely to dominate platforms

Trial underway for Kamloops man charged with kidnapping

Michael Mathieson is charged with armed robbery, unlawful confinement and kidnapping

Most Read