James Milacic purchased a condo at the Playa Del Sol building in Kelowna, B.C., primarily for short-term rental purposes. Unfortunately for him, shortly after his purchase, the B.C. government imposed restrictions on short-term rentals, even in designated buildings like Playa. As interest in short-term rentals waned, Milacic listed his property for sale, but faced difficulties, finding no potential buyers during a six-month period. With nearly 20 units for sale at Playa alone and a lack of interest, Milacic’s experience highlights the challenges many property owners are facing in the current market.
Leanne Weintz, a licensed realtor and vacation rental manager, confirmed that owners in the Playa building are struggling to attract buyers, even as they lower their asking prices. The saturated market has diminished the appeal of purchasing condos in the Playa building, leading to minimal showings and interest. This situation reflects broader trends in Kelowna, where the condo market is becoming increasingly overstocked, with a significant spike in inventory noted by the Association of Interior Realtors.
The Central Okanagan area reported 893 condo units available for sale in August 2025, a marked increase from 755 the previous year. Factors contributing to this surge in inventory include COVID-19-induced demand, new developments being completed, and restrictions on short-term rentals which have left many units unoccupied. Kelowna realtor Tamara Stone attributed the challenges to these various elements, noting that many landlords who had hoped to capitalize on short-term rentals are now trying to sell their properties instead.
The rental market is not faring any better, as the recent completion of numerous rental buildings has resulted in a sharp rise in vacancy rates. Landlords are finding it increasingly difficult to secure tenants, often resorting to offering incentives to attract renters. Although Milacic finally found a tenant for his condo, the rent he receives barely covers his associated expenses, leaving him in a financially precarious situation. His plight underscores the unintended consequences of government policy.
Milacic expressed frustration over the impact of the government’s short-term rental restrictions, appealing to the province to reassess the negative effects these policies have on purpose-built rental properties. He believes that the consequences of such decisions were not adequately considered, advocating for a reconsideration of restrictions that have led to a saturated and challenging real estate market in the region.
B.C. Minister of Housing, Christine Boyle, defended the restrictions, asserting they have successfully increased the availability of long-term housing across the province. Vacancy rates in Kelowna rose from 1.7 percent at the end of 2024 to 4.5 percent as of June 2025. While the government argues that these strategies are yielding positive outcomes for long-term housing, the struggles faced by property owners and landlords raise questions about the overall impact of such policies on the housing market dynamics in Kelowna and beyond.
