There were fewer available places to rent in Penticton in 2020 than there has been for the last 13 years. And the few rentals that were available were listed at historically high prices.
A report from Canada Mortgage and Housing Corporation (CMHC) rental market issued Thursday (Jan. 28) shows that rental vacancies in Penticton dropped to one per cent — down from 2.1 per cent in 2019.
The number of units in Penticton was unchanged in 2020, meaning the decrease in vacancy can be attributed to steady population growth, according to CMHC market analyst Eric Bond.
“To put the numbers for Penticton in perspective, a drop in the vacancy rate from 2.1 per cent to 1 per cent on a rental universe of 2,546 units means that a net additional 28 units became occupied in 2020 compared to 2019,” Bond said.
The population growth may be attributed to an exodus of renters observed in large Canadian cities like Vancouver, Toronto, Montreal, according to Bond. “In B.C., this trend has extended to there being stronger rental demand in smaller towns and cities as well,” he said.
“Contributing factors to this trend include rents being lower in areas outside of the urban core. Many renter households’ budgets were constrained due to the economic impacts of the pandemic, as well as the possibility for some workers to work at a distance, meaning they could reside away from the urban core where their job was previously located.”
Declining vacancy rates were seen in other cities in the Okanagan as well.
In Kelowna the overall vacancy rate decreased from 2.6 per cent in 2019 to 2.1 per cent in 2020. In Vernon the overall vacancy rate decreased from 1.7 per cent in 2019 to 1.0 per cent in 2020.
The last time Penticton had a vacancy rate below one per cent was in 2007 when the rate was 0.7 per cent.
Meanwhile, the average price of a rental in Penticton went up for the ninth consecutive year. The average rental in the city is now $1,070 per month, according to the report.
Rental prices have consistently been on the rise in Penticton since the CMHC started tracking data in 1990 when the average rental was $397 per month.
Average rental prices in Penticton had never topped $1,000 per month until 2019 when they hit $1,040.
Bond predicts that Penticton residents can expect rent prices to continue rising in coming years as demand is likely to continue to grow as well.
“With a steady rental universe and growing demand, rents are likely to continue to see upward pressure in future years, barring any important changes in either supply or demand,” he said.