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Housing construction is failing to keep up with housing demand in the Thompson-Okanagan region and could jeopardize economic growth, according to a report from the BC Chartered Professional Accountant.
The report, BC Check-Up: Live, analyzes demographic and affordability trends across the province. He revealed that the population of Thompson-Okanagan grew to 619,894 in 2021, up 9,837 from 2020.
Although the pandemic has slowed growth over the past two years, this region has fared better than other parts of the province.
“In fact, over the past five years, the population of Thompson-Okanagan has grown at the fastest rate in British Columbia, with new residents drawn here by the lifestyle and recreational opportunities and declining housing prices, and more recently, the ability to work remotely,” said Karen Christiansen, FCPA, FCA, partner at MNP LLP in Kelowna.
Interprovincial migration nearly doubled last year, and many of the people who accounted for a net gain of 6,791 new residents were aged 39 or younger.
Despite the influx of newcomers, the average age in the Thompson-Okanagan region continues to rise, from 43.6 years in 2011 to 45.4 years in 2021. quarter of the population.
Last year, 3,697 new homes were completed in the area. While that’s well above the average of 3,100 over the past decade, it’s still not enough to meet demand.
Housing completions have fallen since the record set in 2019, with attached units falling the most,” Christiansen noted. “Inadequate housing supply in the area has put pressure on housing prices and rents, posing a serious challenge to current and potential residents.”
Between 2017 and 2021, the number of residents in Thompson-Okanagan increased by 50,982 while only 20,524 residential units were completed.
Prices have soared accordingly. The CPABC report shows that the average price of a home sold in the Okanagan rose nearly 10%, selling for $785,660 in May 2022, compared to $716,659 in May 2021. Rental prices have also increased, especially for large units.
In Kelowna, a unit with three or more bedrooms was rented for an average of $1,709 in 2021, up 7.1% from 2020, while the price of a one-bedroom unit increased by 4.0 % to reach $1,191. The vacancy rate for all unit types was below 1.0%.
Christiansen stresses that attracting new residents, especially young people, is essential.
“Our region must continue to attract residents, especially those of working age who generate the goods and services that underpin our local economy. Going forward, it will be essential to generate greater housing development to improve accessibility and affordability,” she concludes.
You can read the full BC Check-Up: Live here.