As the unrelenting fire continues to rage on, firefighters are working tirelessly to bring it under control. The scope of property damage is sobering. Our hearts go out to the families who have been heavily impacted and to the dedicated first responders along with their families.
Over the past 14 days, there was a significant demand for short-term rentals as many people were ordered to evacuate. Looking ahead, the demand for long-term rentals in the region has experienced an unprecedented and sudden surge.
The current count stands at 189 lost structures, not even accounting for the numerous units like those at Lake Okanagan Resort which only count as 5 structures but would count as 217 individual units. The impact on families and individuals is colossal. Moreover, this unexpected and immediate upsurge in long-term rental demand has exacerbated an already tight rental market which could create a big opportunity for investors.
The supply, however, does not look like it will help solve the inventory problem. Looking at the data from the City of Kelowna (as City of West Kelowna/RDCO numbers not available at this time), the approved building permits for Q2 for 2023 tell a story of already insufficient supply in light of high building costs and struggle to find trades.
In the period between April and June, approvals were granted for merely 95 new single-family homes. This pales in comparison to the five-year annual average of 168 new homes for the same quarter. The decline is also apparent in new apartment units, slipping from 766 to 716, as well as secondary suites, declining from 137 to 112.
Though the complete breakdown of the lost structures is yet to be revealed, if we consider that most of them were single-family homes, the overnight impact of the wildfire on supply far outweighs the incremental gains in Kelowna's housing market putting more pressure on the current homes available.
Lake Okanagan Resort likely was reported as 5 structures lost, but does not include the overall impact to the 217 individual units in those structures. A nature of the Traders Cove and Westside Rd communities most homes that were lost appear to be single family homes. Using the City of Kelowna’s new building permits in Q2 for single family homes it will take half a year just to get single family home supply to cover the units lost.
Yes, most home owners will choose to rebuild. But with that it will take time. Services in Traders Cove for example wont be restored for likely 5 more weeks. Builders will be needed to complete the builds, but with some many homes needing to be built how far on the list will each home owner be? Builders will be pulled away from new home builds in other communities to help rebuild. If you, or anyone you know are in need of a builder please reach out we might be able to help get you to the top of the list.
These wildfires might usher in shifts in consumer behavior, especially in fire-prone and wooded areas. Demand could potentially wane in such regions. Much remains uncertain about the real estate market's future trajectory in the wake of this disaster.
Conversations with families in the affected communities reveal a shared sentiment: a strong reluctance to leave the area, even for rentals, due to their deep roots in the community. Consequently, a robust demand for single-family long-term rentals in West Kelowna, particularly in the worst-hit zones, has emerged.
The realm of real estate, regardless of adversity, presents opportunities. Families' strong ties to their neighborhoods—whether driven by proximity to schools, workplaces, or simply the comfort of familiarity—underscore the importance of housing stability.
In conclusion, as the fire's destructive force endures, the urgency for housing solutions intensifies. The unexpected rise in rental demand emphasizes the pressing need for single-family long-term rentals in West Kelowna and Kelowna. Beyond financial prospects, this is a chance to rebuild lives, communities, and the local housing market. By recognizing the human dimension within real estate, we can foster not only transactions but also empathy and solidarity. In this trying time, we have the opportunity to support one another and lay the foundation for a stronger and more resilient community.
Stay safe everyone and have a great week. Glad we can be home again!
Mark and Maddie