The 21-storey Sunset Drive condo tower in downtown Kelowna is not even close to completion but only six of its 117 condos remain to be sold. Just a block way, two new condo high rises – One Water Street - have been approved as the tallest towers between the Lower Mainland and Calgary. And they will likely also sell out.
Downtown, the Ella, a 20-storey tower has just launched its sales office for 116 high-end condos (one bedrooms start around $350,000; two-bedroom and den at $800,000) and at least five other condo towers are planned or underway in downtown Kelowna. But get this: Mission Group claims they have 2,400 potential buyers registered for a chance to buy into the Ella and believe that one-bedroom condos in the project will rent for $1600 to $1800. The Kelowna rental vacancy rate is near zero. (Full disclosure: Ella developer Mission Group will restrict rentals to 30-day minimum, so no Airbnbs).
It all sounds ambitious (and a bit like the last Kelowna boom that ended so badly back in ’08) but walk through the downtown, as we did recently, and it starts to look believable. The lake, beaches and lakeside park are magnificent. There are scores of new craft breweries, restaurant and coffee shops. Kelowna is sexy and white-hot for real estate right now.
The sexy part is the profusion of young people, many drawn to Kelowna because of the University of BC Okanagan campus and the burgeoning high-tech sector, plus the fact that average housing prices, at least until recently, are half the price of Metro Vancouver.
As of August, the composite MLS price for a Kelowna home is $489,310, compared to $982,454 in Greater Vancouver and $689,700 in the Fraser Valley. So far this year, 1,176 condo apartments have sold in the Kelowna area at an average price of $393,600, a price that is up 16.5% from a year ago.
Major Point: You will fall in love with Kelowna, but as an investor, stick to the downtown. A developer-friendly mayor and seven years of improvements have created one of B.C.’s great emerging urban cores. A long play would be land assembly of the many older detached houses that fringe the downtown. They would be a snap to rent out and, based on the density zoning going on, will be prime for development sites.