Earlier this year, Statistics Canada confirmed that Kelowna is one of the fastest growing cities in Canada with a population growth of 8.4 percent between 2011 and 2016. On the real estate front, we can confirm that the trend is real.
With continued population growth, the city of Kelowna is also experiencing a building boom. In 2016, the City of Kelowna issued residential building permits for 1,950 new units, a 36% increase from 2015 and a whopping 90% increase over 2014 figures. That means that we can expect to see more new units on the market over the coming months, though pre-sales of condos and townhomes are strong and developments often sell out before construction is completed.
Where are Kelowna’s new homes being built?
The past two years have seen a shift in development location. It may come as a surprise to learn that the Highway 97 sector represented 25% of residential building permits in 2016, the highest of any other neighbourhood. The Central City sector boasted building permits for 468 units or 24% of the total.
Prior to 2015, Glenmore/Dilworth saw the highest numbers of new residential development for six years. This year, that number was just 237 units, 12% of the total. In fourth place is the South Pandosy sector with 203 units (10%), followed by Rutland with 105 units (5%).
What types of homes are being built in Kelowna?
In 2016, single/semi-detached housing units accounted for about 36% of building permits and multi-unit housing represented the remaining 64% of new units. The City has placed great emphasis on a desire to densify neighbourhoods and slow urban sprawl, so these figures are essentially a reversal of 2014 figures when new units were 60% single/semi-detached and 40% multi-unit housing.
Single/semi-detached housing units include single-family homes, duplexes, carriage houses, suites, and manufactured/mobile homes. Multi-unit properties are represented by condominiums and townhomes.
Single/Semi-Detached housing in Kelowna
Permits were issued for 706 single/semi-detached housing units in 2016.
- 23% are in Glenmore/Dilworth
- 20% are in the Southwest Mission
- 15% are in Rutland
- 14% are in Belgo/Black Mountain
- 8% are in Central City
Multi-Unit housing in Kelowna
Permits were issued for 1,244 multiple housing units in 2016.
- 39% in the Highway 97 sector
- 33% in the Central City sector
- 12% in the South Pandosy sector
- 6% in Glenmore/Dilworth
- 6% in North Mission/Crawford
- 4% in Rutland
UBCO contributes to Kelowna’s construction boom
Apartment-style units accounted for 466 of the 474 multiple housing units in the Highway 97 region. All of those apartment units are located next to the UBCO campus on Academy Way. In 2015, building permits were issued for 362 apartment units on the same street, bringing the two-year total to 828 new apartment/condo units neighbouring the Okanagan campus of the University of British Columbia.
Kelowna’s new urban trend
The push for densification and walkability in neighbourhoods has lead to more urban development. 47% of all residential building permits issued in 2016 were for units located in Kelowna’s Urban or Village Centres. This represents a 772% increase from 2014 when permits were issued for 105 units in Urban or Village Centres.
Of the 916 new residential units in these neighbourhoods, 97% are multiple housing units. This includes the multi-unit developments on Academy Way, Central Green, and SOPA Square.
The Urban Core Area
Introduced as part of the 2030 Official Community Plan, the Urban Core Area encompasses a large region of the Kelowna and includes Downtown Kelowna, Central City along Highway 97, part of Rutland, and the South Pandosy community. In 2016, 39% of all residential building permits (757 new units) were for units located within the Urban Core Area. Of these new units, 81% are multiple housing units.
The heart of the Central Okanagan
In 2016, Kelowna accounted for 75% of all residential development within the Regional District of the Central Okanagan (RDCO), which includes the City of Kelowna, the District of West Kelowna, the District of Lake Country, and the District of Peachland.
Kelowna’s 2017 building trends
With rental vacancies at an extreme low and a lack of real estate inventory driving home prices higher, the City of Kelowna is continuing to work with developers and homeowners to green-light building projects in 2017. We aren’t even half-way through the year and we have already seen tremendous progress on several large developments.
Kelowna Residential Building Permits January – April 2017
|Building/Permit Type||Permits||New Units||Total Value|
|Apartment – New – Res||11||796||$82,085,000.00|
|Carriage House – New||15||15||$2,504,625.00|
|Four Family – New – Res||2||8||$3,200,000.00|
|SFD – New – Res||142||142||$71,419,642.00|
|SFD – New with suite – Res||35||70||$15,865,000.00|
|Three Family – New – Res||1||3||$1,200,000.00|
|Townhouse – New – Res||6||26||$5,898,060.00|
|Two Family – New – Res||7||14||$3,930,000.00|
In addition to the permits listed above, there are also several new developments that are currently going through the approvals process:
- Aqua on Lakeshore Road (The Mission Group)
- Ella, a concrete condo building on Lawrence Avenue and Ellis Street (The Mission Group)
- One Water Street, a proposed condo development on Cawston Avenue and Ellis Street (North American Development Group and Kerkhoff Construction)
- A 60-unit apartment rental building on the corner of Dougall Road and McIntosh Road
- Vineyard Estates, phase 2 development in West Kelowna
- And much more
What does this mean for real estate in Kelowna?
The cost of land has been steadily increasing over the past several years, which means that the cost of a new home has gone up too. It’s also interesting to note that we are seeing a polarising effect in a lot of the new home construction, with builders either opting for small-footprint condominiums or expansive 4+ bedroom homes with multiple living areas. There does seem to be a bit of a gap in the market for new construction mid-range housing.
An influx of completed development may help to balance the real estate market in Kelowna, but don’t expect a drop in prices. Most of the new condo and townhome developments in the city have been selling out before construction is completed and we are seeing demand from the Lower Mainland, Toronto, and Alberta. The fact is, the Okanagan is a beautiful place to call home and the word has definitely gotten out.
If you’re looking to buy or sell property in Kelowna, contact the team at Walker Real Estate.