In Kelowna, B.C., a notable increase in rental housing has altered the previously tight market, where low vacancy rates and high prices have been persistent issues. In 2025 alone, approximately 1,100 new rental units have been introduced, with projections suggesting an additional 2,000 units may arrive in the coming year. James Moore, manager of the City of Kelowna’s housing policy and programs department, emphasizes that this influx is beginning to alleviate some of the pressure on the rental market. Government incentives aimed at stimulating construction have catalyzed this growth, particularly focusing on condominiums and rental properties, making it the most viable property type to develop.
As a direct result of the new units entering the market, Kelowna’s vacancy rate has significantly improved, rising from 1.7 percent in June 2024 to 4.5 percent in June 2025. This shift has created a more favorable environment for renters, who are now benefiting from lower rental costs. The dynamic has also reversed; landlords must now compete for tenants, which is a considerable change in the local rental landscape. This competitive atmosphere is a marked departure from the historical context where renters faced stiff competition for limited housing options.
Faced with heightened competition, landlords are offering various incentives to attract renters. Troika Developments has introduced significant perks at its latest purpose-built rental complex, ‘285 Dougal,’ including options for up to two months of free rent, move-in bonuses, and incentives related to parking and internet services. Such offerings are unusual in markets like Kelowna, where low availability typically drives prices up without added bonuses. However, economists like Micheal Mak from the Canadian Mortgage and Housing Corporation (CMHC) note that similar practices are more common in markets like Calgary, indicating a broader trend in response to shifting rental dynamics.
Nevertheless, experts predict a slowdown in the construction of new rental units in the upcoming years. Economic conditions, fluctuating interest rates, and rising construction costs may constrain future housing developments. Moore points out that without continued growth in purpose-built rental construction, the vacancy rate could revert to unhealthy levels, leading to renewed price surges. The sentiment is echoed by Kennedy, who stresses the importance of ongoing dialogue with policymakers to ensure a sustainable supply of rental housing, targeting a vacancy rate of 3 to 5 percent as an optimal range.
In reflecting on the current trajectory, both Moore and Kennedy advocate for sustained momentum in the housing sector, warning against complacency. As the market dynamics shift, it is crucial to continue building rentals to avoid a return to past challenges. The progress made in increasing the rental pool is promising, yet it hinges on the collaborative effort of developers, policymakers, and the community.
Ultimately, the ongoing developments in Kelowna’s rental market signify a crucial turning point for renters. As more units become available and landlords adopt tenant-friendly tactics, the city stands poised to create a more balanced rental landscape. However, maintaining this balance will require vigilance and commitment from all stakeholders to ensure that housing remains accessible and affordable, fostering a healthier rental environment for future generations.
