This mid-size Okanagan city experiencing biggest housing boom in valley
Kelowna is the obvious go-to place for newcomers to the Okanagan with one of the fastest growing populations in the country and a building boom that saw $1.15 billion in building permits issued in 2021.
But people who want a smaller town experience, with smaller prices, are going to Penticton, Vernon and West Kelowna – all about the same population at about one-quarter the size of Kelowna.
Even though Penticton had the slowest population growth rate of the three during the last census period at 9.3% (versus 11% for Vernon), it led the way when it came to new housing construction.
"We can’t seem to build it quick enough, like everyone else,” Anthony Haddad, general manager of community services for the City of Penticton told iNFOnews.ca.
Right now there are about 460 residential units under construction with 1,500 at various stages of approval.
Only 20% are single-family with the rest ranging from duplexes up to a 180-rental apartment building that was fully rented out on its first day and now has a waiting list.
“There is always going to be a lot of demand for single-family but, what it comes down to is, the affordability of a single-family home today is not the same as it was 10 years ago,” Scarlett Barber, a realtor with Re/Max Orchard Country, told iNFOnews.ca.
New single-family homes in Penticton start at $1 million or more, which is just not affordable for many buyers.
“We also have to keep up with the demand of people moving up here,” Barber said. “Building fourplex houses for families right away versus building a single-family house with about the same material.”
That’s why Penticton, like many other cities, is densifying its downtown core and is experiencing what Barber calls “shrinkflation” – meaning housing gets smaller but the prices keep going up.
Since 2014, there have been 3,142 new housing units built in the city, Haddad said.
In the past five years, from 2018 until the end of 2021, 2,179 new housing units were created, according to City of Penticton online data.
By comparison, during that same five-year period, Vernon, which has about 8,000 more residents than Penticton, saw 2,165 new units created.
West Kelowna, which is the smallest of the three in terms of population (barely), saw only 1,924 new housing units created.
Penticton is constrained by Okanagan and Skaha lakes, steep hillsides and Penticton Indian Band lands so, densifying the core area just makes sense.
READ MORE: BOOM TOWNS: All the new housing on the horizon in Okanagan, Kamloops
The one exception is the 700-unit Wiltse lands development that will extend to the city’s eastern boundary. Most of those, about 550 units, are multi-family townhomes.
The big development focus in the coming years will be North Gateway – lands around the South Okanagan Events Centre that now have about 370 homes.
That’s expected to grow to 1,750 to 2,250 new housing units in the coming years.
The plan calls for up to 350 new hotel rooms (the 105-room Four Points Sheraton Convention Hotel is already under construction) along with 30,000 square feet of commercial space, two ice rinks and an expansion to the convention centre.
City council recently approved 300 units in six storey buildings for North Gateway.
The Sheraton is also going to be six storeys, with a rooftop patio, which is typical of the maximum building heights expected in the city.
Much of the land is constrained by the fact that it’s on the flightpath to Penticton Airport, which imposes height restrictions of 12 to 15 storeys.
But that airport is also key to attracting new residents to the city since it’s only a five minute drive to most parts of the city and even attracts West Kelowna residents who find it easier to drive there than to Kelowna International Airport.
READ MORE: iN PHOTOS: Most expensive home for sale in Canada is in the Okanagan
One quarter of the new residents are coming from the Lower Mainland, according to a questionnaire filled out by people picking up welcome packages from the city, Haddad said.
Another 17% are moving there from other parts of the Okanagan, 14% from Alberta, 13% from Ontario and 7% from other parts of B.C.
And, while it might be expected that most of the newcomers are retirees, that’s not the case.
Retirees accounted for only 21% of the 120 people who filled out the survey while 34% either came for a job or because their partner had a job to come to.
Another 16% were people who are working remotely with 6% planned either to open a new business or buy one, Haddad said.
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