Construction of new housing was down in September for Kelowna, but the new housing starts trend continues to be at a historic high in the city.
According to the Canadian Mortgage and Housing Corporation (CMHC), work still began on multiple major residential developments in September, despite the minor decline in housing starts.
"Given the pace of construction that we have seen in Kelowna this year, particularly on the multi-unit side, the trend measure is still quite elevated in a historical sense due to the start of some additional new rental apartment units that occurred in September," said CMHC Senior Market Analyst, Taylor Pardy.
"So really when we say the trend measure moved down, you have to take into consideration that the actual level of that trend measure is still quite elevated."
Kelowna's rental vacancy rate has sat at a historic level of below 1% since 2015, but the market appears to have responded to the demand with new apartment and condo rental projects being a major driver of housing trends in the city, comprising almost 57% of new housing starts in 2017.
"What we've seen over the past two years is that vacancy rates have been historically low in Kelowna. What this has done is spurred builders to begin to look at building rental again, for the first time in a long time, so what we have in 2017 has been a culmination of tightness in the rental market and increasing demand due to population growth and builders getting some new rental underway because of it," explained Pardy.
According to CMHC, rental apartment building projects account for over 1,600 of the total 2,912 housing starts in 2017.
While construction has started on several rental apartment projects, the units are not ready to move into just yet and rent continues to climb in the city.
Kelowna moved past Calgary to become the seventh most expensive city for rent in all of Canada.
All the new units have come as developers in Kelowna have scrambled to fill the dearth of available homes in a city where vacancy rates are essentially zero.
However, rent in Kelowna continues to climb, and the city continues to become more and more expensive for renters.