It's tough to figure out what's really going on with Kelowna's economy

Population is up, but the labour force and job postings are down.

Housing starts are way up and so are apartment rents, but home prices and the value of building permits have plummeted.

The number of businesses in the Central Okanagan is up slightly as is the number of passengers at Kelowna airport.

Such is the massively mixed bag of economic indicators in the Central Okanagan for the second quarter of this year (April, May and June).

Essentially, that's what was happening in the spring in Kelowna, so it lags a little.

The indicators don't take into account the summer we've just had, which was spectacular weather-wise, but soft economically as tourists were careful with their money in the wake of restrictions on short-term rentals and consumer confidence waned further amid high prices and housing unaffordability.

Krista Mallory, the manager of the Central Okanagan Economic Development Commission, said the region's economy is strong overall, but not immune to shakiness caused by overarching factors from continued high interest rates, inflation and building material costs to labour shortage, housing unaffordability and consumer hesitancy.

"There's a lot of variation in the indicators and a lot of uncertainty still," she said.

"The (Bank of Canada) interest rate going down again today is positive, but it hasn't fallen far enough to have much of an impact so far."

Here's how the indicators played out in Q2, as compiled by the Central Okanagan Economic Development Commission from various reporting agencies from BC Statistics, the City of Kelown and Central Okanagan Regional District to Canada Mortgage & Housing Corporation, Statistics Canada and Kelowna International Airport.

Population

The commission's report pegged the population of metropolitan Kelowna (essentially the Central Okanagan) at 247,216 at the end of 2023, up 2.9% from the 237,113 it was at the end of 2022.

Those numbers lags the population of 256,944 that a KelownaNow story featured at the end of May based on a BC Statistics estimate.

In fact, KelownaNow made a big deal of the number because it was the first time that metro Kelowna had broken the quarter of a million mark.

Business count

At the end of 2023 a total of 34,262 businesses with at least one employee were operating in the Central Okanagan, up 5.4% from the 32,508 at the end of 2022.

The vast majority of the businesses are small, proving once again that its small businesses and entrepreneurs that drive the local economy.

Despite the tough economy, it's small business that can react, retract and expand quickly as economic conditions change.

Building permit values

From January through June this year, building permits were issued for construction valued at $576 million, down a whopping 34.5% from the $880 million during the same period last year.

That means there will be less construction in the near future, which reinforces the trend of developers being careful and not building as much while they wait for the economy to improve, interest rates to come down and consumer confidence to bolster.

Housing starts

Ironically, new home construction starts January through June this year are up a jolting 53.8% to 2,714 units.

The vast majority of that is apartment and condominium units by developers who secured building permits in late 2023, before the slowdown in building permits issued in 2024.

Median new house price

In Q2 the median was $992,500 for a brand new single-family home, a 24.4% plunge from the $1.3 million.

It may not be comparing apples to apples because over the past year, developers are building less luxurious new homes in favour of more basic units to appease careful consumers looking at a lower price point.

Price drops are not as dramatic in the resale home market where the Association of Interior Realtors reports the July benchmark selling price of a single-family home was $1,025,200, down 4.2% from a year earlier, a townhouse $779,200, actually up 1.7% from last year, and a condo at $493,900, off 4.5% from a year earlier.

Apartment rent

As home purchase prices ease a bit, apartment rents have gone up because demand for rentals is still strong with people renting because they can't afford to buy.

Average rent for a two-bedroom apartment in Kelowna at the end of 2023 was $1,794, up 7.7% from a year earlier.

Labour force

At the end of June, a total of 111,233 people were employed in the Central Okanagan, down 3.6% from the 117,050 a year earlier.

The slow economy means there's been some layoffs.

Job postings

The soft economy means employers aren't hiring as much, which is reflected in hefty reduction of available jobs being advertised.

From January through June, 12,128 job postings went up in the Central Okanagan, a 24.5% fall from 16,066 a year earlier.

Despite Kelowna's 4.8% unemployment rate, there's still somewhat of a labour shortage in Kelowna with some employers having a hard time hiring and retaining skilled workers, particularly in the trades, equipment operators and in transportation.

Airport passengers

The number of departing and arriving passengers at Kelowna International Airport was up 3.2% in the first half of this year to 1,031,381.

That's a full recovery from the pandemic and possibly sets the airport up for a record-high annual passenger count at the end of 2024.