Image Credit: ADOBE STOCK
October 19, 2017 - 2:36 PM
KAMLOOPS - It’s a competitive and expensive market to get into in Kamloops.
No, not buying a home. In fact, it’s a step which usually comes before that, renting a place to live.
For the past two years, the apartment vacancy rate in Kamloops has been dropping, and a senior market analyst with Canadian Mortgage Housing and Corporation says it could decline more this year.
Taylor Pardy says the vacancy rate was generally healthy in Kamloops between 2012 and 2014. Many factors play into a healthy rental market, including a year of population loss instead of growth.
“What we saw during that period of time… if you look at 2012 for example, Kamloops actually lost about 103 people and then kind of recovered from there,” Pardy says.
Part of that population loss is attributed to an attraction to the prairie provinces and the booming energy sector at the time which drew people from across B.C. But that reversed in 2014, Pardy says, when migration to Kamloops picked up again.
“We have been seeing over the past few years a number of people moving back to Kamloops, particularly from the prairie provinces, as well as from other places in B.C.,” he says. “All those factors… have been contributing to some stronger population growth and that’s generally been translating to some strong rental demands.”
The vacancy rate was hovering just below four per cent between 2012 and 2014, except for a slight dip in 2013. But in 2015, when Pardy says the migration to Kamloops began to make an impact, the rate dropped to 2.3 per cent.
As of October last year, the vacancy rate for apartments in Kamloops was 1.1 per cent. This doesn’t account for all rentals because Canadian Mortgage and Housing doesn’t track secondary rental market data, like basement suites.
However, rents start to rise once the rate gets close to that one per cent mark.
“In my analysis of the market, what you kind of begin to see happen is when the vacancy rate… gets around one per cent or even below that one per cent mark, that’s when you really start to see your average rent start to pick up more strongly,” Pardy says.
For existing units in Kamloops, the average rent price went up slightly in 2015 and 2016, although Pardy says it hasn’t made a significant impact — yet.
Another factor driving rents up is new apartment buildings being built. Pardy says there’s a bit of a premium on newly built units.
“With the number of people moving to the province and contributing to that demand for rental, we have been seeing the average rent move upwards especially for the newer units that are just coming onto the market,” he says.
Last year, the average rent for a one-bedroom apartment in Kamloops was $858 and the average price of a two-bedroom was $944. If you compare that to one-bedroom units built after the 2000, the average rent was $1,178 last year.
Pardy says more rentals are being built and it could help mitigate the crunch on the city’s vacancy rate. But at least for this year, the corporation is still expecting a slight decline in the vacancy rate. Last year, the vacancy rate dropped more than what was forecast.
“We’re starting to see some more interest in new rental construction in the Kamloops area so that’s definitely going to factor into our forecast going forward,” he says.
Canada Mortgage and Housing will be issuing their annual rental market report next month and it will include more specific data on the change in Kamloops over the past year.
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News from © iNFOnews, 2017