It's that old adage of supply and demand.
The supply of rental apartments in Kelowna is surging, pushing down demand to pay record-high rents.
As such, since rent for a one-bedroom apartment in the city peaked at $2,010 in August 2024, it's been on a slide to $1,910 in January and now $1,850 in March, according to the just-released monthly Canadian Rent Report by Zumper, the online platform that lists apartments for rent.
$160 a month less rent is a big deal in the rental world.
Especially when a renter can combine that savings with the one-or-two months free rent deals that abound out there.
Landlords are offering such incentives — usually when a renter commits to a 14-month lease — to fill units in a suddenly different market.
Photo credit: ZumperMission Flats is offering two months free rent to tenants who sign a 14-month lease.
Let us explain.
It was only in 2023 that the rental vacancy rate in Kelowna was 1.3%, according to Canada Mortgage & Housing Corporation.
That's tight.
It meant that for every 100 apartments in the city, only one would be available for a new renter any given month.
That created intense demand for the few apartments available and drove up the price because renters had no other choice and landlords could capitalize on that.
Recognizing the apartment shortage crisis, the City of Kelowna and Canada Mortgage & Housing Corporation worked in tandem to spur more rental apartment building construction by offering tax incentives, additional density, reducing red tape, speeding up approvals and easing strict parking provisions.
In addition to creating more apartments to fill the pent-up demand, more supply was also expected to start making Kelowna rents more affordable.
It worked.
Thousands of new apartments have been completed in the past few years and 2,000 more are expected to be finished and come on the market over the next year.
The vacancy rate is now estimated to be around 5% or 6%.
Kelowna currently has about 24,000 rental apartments, which is about one-third of the dwelling units in the city.
The other 50,000 units are single-family homes, townhouses and condominiums.
As those types of housing are expensive — $1 million for a typical single-family home, $750,000 for a townhouse and $500,000 for a condo (and require big down payments) — many people had to turn to renting, whether they liked it or not.
However, $1,850 a month rent for a typical one-bedroom apartment in Kelowna is still not cheap.
Kelowna remains the 7th most expensive in the country behind Vancouver at $2,500, Burnaby with $2,300, Toronto at $2,300, Victoria with $2,070, Halifax at $2,010, Ottawa at $1,980 and tied with Barrie with $1,850.
That means there are probably still lots of people that continue to live with their parents or roommates when they might prefer a place of their own.
But, lower rents and free-month-of-rent incentives are also convincing some people to make the jump to their first apartment or existing renters to upgrade, leaving vacant a cheaper apartment for a first-time renter to get into.
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The Zumper report tracks one-bedroom rent in 23 cities across the country.
The cheapest places to rent a one-bed are Regina at $1,240 a month, Edmonton with $1,300, Saskatoon at $1,300, Quebec City with $1,310 and Winnipeg and Windsor both at $1,400.
Zumper bases its rankings on the trend-setting rents of one-bedroom apartments.
But it also has a section for two-bedroom rents.
Last month, monthly rent for a typical two-bed in Kelowna was $2,250, which is actually up a bit from the $2,230 it was in February, but down from the $2,320 it was in January and well off the record-high of $2,700 it was in September 2023.
Thumbnail photos from Zumper
