A Regional Opportunity in Rental Housing
In the Okanagan Region in British Columbia’s southern interior, rental vacancy rates are commonly at or even below a remarkably tight 0.5 per cent, in contrast to the 3-4 per cent benchmark that is considered balanced.
This is an outcome of a decade or more of limited construction of rental units, during which time such projects have typically not been economically viable for developers. ACIC, however, is closely monitoring for projects that have the right combination of features for profitability. In contrast to larger urban centres, the region has relatively low land costs. If buttressed with modular or other low-cost construction methods, and with concessions on municipal requirements that contribute to costs, this could tip the balance in favour of specific developments.
And if they can be built cost effectively, rental developments can be attractive and potentially stable income generators. The key risk on the income side is a possible vacancy rate spike due to factors such as major employment loss. That, however, is a low risk in the increasingly economically diversified Okanagan region, where both population and employment are growing.
Qualified investors with potential interest in participation in a project of this type can contact ACIC at [email protected]