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Growth in TAMI and Senior Rental Sectors Make Kelowna One of the Best Regions for Multi-Family Investments

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(Posted on Dec 31, 2016 at 02:00PM by Michelle Bogle)
multi-family investments vancouver bcIf you’ve been following Vancouver's residential real estate market, you know that Canada’s West Coast is one of the world’s hottest. From local tech enterprises to wealthy foreign investors, demand for properties across British Columbia seems endless. And, it is. 
 
But, even as the residential housing market is going gangbusters, the province’s multi-family sector is equally booming. Property values continue to climb, vacancy rates continue to drop and rental rates are reaching unseen levels – some of the highest in Canada.
 
And, as we welcome the new year, certain regions in B.C. are expected to perform better in 2017, especially as growth in the technology and senior rental sectors continues to drive demand. 
 
In today’s post, we take a closer look at Kelowna, which is named one of the best regions for multi-family investments in the coming year.
 
Kelowna
Forecast: rental vacancy rate of 1.5% through 2017
Average two-bedroom rental in 2017: $1,050
 
With the completion of Kelowna’s Okanagan Centre for Innovation, the Okanagan’s biggest city has emerged as a top spot for the TAMI sector – technology, advertising, media and information – and the hundreds of millennials that it employs. There are now 140 TAMI firms in Kelowna, driving a forecast of employment growth of 2.2% into 2017. The rental vacancy, which is now at 0.5%, is expected to inch up next year, but remain one of the lowest in Canada. 
 
Investors can find older multi-family buildings in the $85,000 - $90,000 per door range with capitalization rates of 6%. Also, Kelowna’s Rental Housing Grants program provides up to $320,000 in annual grants for purpose-built rental housing projects, which adds to the region’s appeal.  
 
Seniors make up another strong rental sector with 20.6% of Kelowna’s population. This figure is well above the national average of 16.1%. 
 
For off-shore investors, Victoria is also exempt from the 15% property transfer tax on foreign buyers in Metro Vancouver, making it a next-best choice for those looking to invest in B.C.’s burgeoning multi-family sector.
 
For more information on investment opportunities in Kelowna, please contact Marcus & Millichap’s Vancouver office to speak with one of our highly skilled commercial real estate advisors.
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