Construction booming in Kamloops, Okanagan as real estate market slows
Ever increasing interest rates – including the half a percentage point hike to the key interest rate by the Bank of Canada Wednesday – have slowed the house resale market across Canada.
While that picture is similar in Kamloops and the Okanagan, the new housing market and other construction projects continues to meet or exceed last year’s pace.
By the end of September, the value of building permits issued by the City of Kamloops hit $320.3 million, more than double the $144.4 million issued for the first three-quarters of 2021.
“There is not the one big project that really drives the numbers,” Jason Dixon, building and engineering development manager for the city, told iNFOnews.ca. “It’s more across the board.”
READ MORE: Bank of Canada raises interest rate by half percentage point, says more hikes to come
In Kelowna, building permit values were down a bit from the record set in 2021, but only by about $17 million to $932.6 million.
Permit values were up in West Kelowna (to $188.8 million), Vernon (to $165.2 million) and Penticton (to $162.9 million).
Overall, permit values in the region’s five largest cities were just under $1.77 billion to the end of September, up more than $235 million from last year.
“The construction activity currently ongoing in the market and the new starts this year – those are based on developments that have sold in the marketplace already,” Luke Turri, chair of the Okanagan Urban Development Institute, told iNFOnews.ca. “The new construction brings to fruition those projects approved earlier this year or back into last year.”
Kamloops had a big year for building permits in 2020 with the Royal Inland Hospital tower and permits totalling $416 million for the year.
At $320 million so far this year, that record seems secure but the city did issue $46 million in permits for renovations to older parts of the hospital.
Another big permit ($35 million) was for the foundation of the new City Gardens towers. It’s three storeys of parking for four of the six towers, Dixon said.
READ MORE: Largest ever Kamloops residential development clears final hurdle at City Hall
The rest are spread between industrial, a couple of restaurants, two new apartment buildings in Aberdeen along with single-family and other developments.
But, things seem to be slowing in Kamloops.
“The number of active applications, on the planning side, has slowly been going down,” Dixon said. “Anecdotally, we’ve been noticing things slowing a little bit but we certainly haven’t seen a real sudden drop in activity or a real sudden stop to construction at all.”
Kelowna permits included $58 million for Water Street by the Park’s foundation for its highrise towers, $50 million for a 127-unit waterfront housing project on Lakeshore Road called Caban and $33.9 million for the final two buildings in the Central Green development.
READ MORE: Why Central Green never became the 'gateway' to Kelowna
Still to come in Kelowna, possibly next year, will be building permits for things like the new 43-storey UBCO downtown campus and the 33-storey Westcorp waterfront hotel. There are about a dozen highrises in the planning stages and many smaller projects on the go.
READ MORE: Plans to build highrise hotel on downtown Kelowna waterfront moving ahead
“Broadly speaking, you still see the confidence in our local marketplace, just because of the advantage the Okanagan has, perhaps, compared to other markets,” Turri said. “There still is bullishness, long term, to continue to invest in the Okanagan.”
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