Construction taking a hit in Kelowna but still booming
There has been a 19% drop in the value of building permits issued by the City of Kelowna in the first half of this year compared to last year.
But 2021 was a record-setting year with permit values passing the $1 billion mark for the first time ever, finishing the year at $1.15 billion.
In the first half of 2021, the city issued permits valued at $687.6 million, down from $814 million for the same period in 2021, says a report going to Kelowna city council on Monday.
To put that in perspective, this year is $150 million higher than any of the previous 10 years, except for 2021.
That’s also more than the City of Kamloops issued in all of 2020 and 2021 combined ($616.4 million).
While not at last year’s record breaking pace, the number of new applications continues to be very strong and city staff are starting to get behind, a report that’s going to Kelowna city council on Monday says.
That’s due, in part, to the city adopting a new community plan this year and staff are working on major changes to zoning bylaws, the report says.
“A transition back to normal, quick paced approval timelines will be forthcoming later in the year and into 2023,” it says.
In the first six months of the year, building permits for 1,478 housing units have been issued with about 1,100 being in the city’s urban centres.
The vast majority of residential building permits, 75%, were for multi-family versus single-family, up from the 70% average over the previous five years.
“It is expected that both planning applications, building permit volumes and construction values will continue to recede from record levels through 2022 and 2023,” the report says.
READ MORE: Pace of housing construction needs to triple in Thompson-Okanagan
“A combination of higher interest rates, interest rate uncertainty, labour shortages, material cost increases and material availability will all be impacting the city’s housing market and development approvals process in the months/years ahead – suggesting the importance of securing housing opportunities that are currently planned.”
That means some condo projects may be put on hold until construction costs and interest rates stabilize, it says.
READ MORE: BOOM TOWNS: All the new housing on the horizon in Okanagan, Kamloops
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