A perfect storm forces Vernon’s vacancy rate down

Feb 9, 2021 | 1:45 PM

A red hot real estate market, more people moving to Vernon, and lower multi-family construction starts have combined to drive Vernon’s rental vacancy rate down to one per cent.

It has historically sat between 1.5 per cent to 1.9 per cent.

“We have not had a rental vacancy rate like that since 2008. [It’s] so incredibly low,” Kevin Poole, manager of economic development and tourism, said. “This is an opportunity for the developers, and a challenge for the community.

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Vernon saw a population growth of nearly 1,100 people in 2020 including a record 286 international relocations.

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According to Statistics Canada the age breakdown was 0 to 14: 13.4 per cent; 15 to 64: 60.3 per cent; 65 and older 26.3 per cent.

The North Okanagan, combined, now has over 92,000 residents, a growth of 1.4 per cent over 2019.

Construction

2020 saw a decrease in both single family and multi family construction following a robust 2019.

There were 329 new housing units build last year, compared to 458 in 2019.

“What can be done to promote multi family development? Coun. Kari Gares asked at this week’s council meeting.

Trade shows were a venue in the past for starting relationships with developers, but that has been on the back burner due to COVID restrictions.

“We promote that vacancy rate pretty far and wide as a true opportunity,” Poole said. “The challenge is to find a parcel of land big enough. If you are doing 150 to 200 units, you need a large site to do that.”

Real estate

The Okanagan Mainline Real Estate Board (OMREB) reports residential sales growth of over 31 per cent to $1.27 billion, for the area from Enderby to Predator Ridge, as people left larger cities.

At the same time, there was upward pressure on prices with the average single family home sale now at $583,000, up from $523,000 in 2019.

“I don’t think anyone could have predicted a rebound quite like we saw,” Poole noted.

The city is working on items like secondary suites and affordable housing, but given all factors involved, including rebounding employment, the housing gap will continue.

“A vacancy rate of one per cent, honestly it’s a scary number, it’s incredibly scary,” Gares said “That basically tells us that not only do we have a backlog, we are going to continue increasing the backlog, because there simply is not enough inventory out there.”

by Kevin Rothwell

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