Home construction is failing to keep up with the demand for housing the Thompson-Okanagan and it could put economic growth at risk, according to a report by the Chartered Professional Accountant of British Columbia.
The report, BC Check-Up: Live, analyzes demographic and affordability trends across the province. It found the population of the Thompson-Okanagan grew to 619,894 in 2021, up 9,837 residents from 2020.
While the pandemic slowed growth over the past two years, this region fared better than other parts of the province.
“In fact, over the last five years, the Thompson-Okanagan’s population grew at the fastest rate in B.C., with new residents drawn here by lifestyle and recreational opportunities and lower housing prices, and more recently, the ability to work remotely,” said Karen Christiansen, FCPA, FCA, partner at MNP LLP in Kelowna.
Inter-provincial migration nearly doubled last year, and many of the people who represent a net gain of 6,791 new residents were 39-years-old or younger.
Despite the influx of new arrivals, the average age in the Thompson-Okanagan continues to rise, going from 43.6 in 2011, to 45.4 in 2021. People 65 and over make up nearly one-quarter of the population.
Last year, 3,697 new housing units were completed in the region. While that’s well above the average of 3,100 over the past decade, it’s not keeping up with demand.
Housing completes have declined since the record set in 2019, with attached units down the most,” noted Christiansen. “Inadequate housing supply in the region has put pressure on housing and rental prices, posing a serious challenge to both current and potential residents.”
Between 2017 to 2021, the number of residents in the Thompson-Okanagan increased by 50,982 while only 20,524 residential housing units were completed.
Prices have soared as a result. The CPABC report shows that the average price of a home sold in the Okanagan increased by nearly 10 per cent, selling for $785,660 in May 2022, compared to $716,659 in May 2021. Rental prices also increased, most significantly for larger units.
In Kelowna, a three-plus bedroom unit was rented on average for $1,709 in 2021, up 7.1 per cent from 2020, while the price for a one-bedroom unit increased by 4.0 per cent to $1,191. The vacancy rate for all unit types was below 1.0 per cent.
Christiansen points out that attracting new residents, in particular younger people, is essential.
“Our region needs to continue attracting residents, particularly those of working age who generate the goods and services that underpin our local economy. Looking ahead, it will be critical to generate greater housing development to improve accessibility and affordability,” she concludes.
You can read the full BC Check-Up: Live here.