City says low apartment availability no cause for alarm
By Adam Proskiw
(ADAM PROSKIW / iNFOnews.ca)
June 12, 2014 - 11:55 AM
“IT’S JUST THE MARKET DOING WHAT THE MARKET DOES.”
KELOWNA – A recent survey on Canadian rental markets lists Kelowna as being among the worst for finding an apartment, but Kelowna’s long range planning department is not worried.
Planning manager Gary Stephen says although there hasn’t been a lot of rentals built in the last few years, he expects the higher demand will quickly entice developers back into the market.
“There were times I remember in the 1990’s when the rate has been down to less than half a per cent,” he says. “It’s been extremely low but it goes back and forth all the time.”
According to the survey, Kelowna is well below the national average with only 1.5 per cent, down from 4.8 per cent last year.
Only Calgary and Edmonton had lower vacancy rates, both with 1.4 per cent.
“It tends to go in waves,” Stephen says. “When the vacancy rate goes up, developers stop building apartments because they can’t rent them.”
Stephen says although the city doesn’t get involved in the housing market, they do offer incentives to developers in the form of tax breaks and grants when the rate drops below three per cent. He also points out that a low rate is better than a very high rate, since that indicates a lot of apartments are either going unrented or are renting for a low price.
“A high rate of 10 per cent would not be good at all,” he says. “A healthy vacancy rate is generally around three per cent but as the population continues to grow the vacancy rate gets lower and lower. When the rate is low like it is now, it will entice more developers into the market and the rate goes up again. It’s not a cause for alarm, it’s just the market doing what the market does.”
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News from © InfoTel News Ltd, 2014