Kelowna continues to attract newcomers drawn to its lifestyle, natural beauty, and growing community. As of 2024, Kelowna's population has grown to an estimated 155,981, up from 144,576 in 2021. While British Columbia's population growth rate is steady at 3.3% annually, there has been a decrease in interprovincial migration as fewer people relocate from other provinces. However, the Okanagan remains appealing, especially for those seeking a change from denser urban centers. The rising demand for homes, coupled with an ongoing housing shortage, has left many residents asking: is it more affordable to buy or rent in Kelowna today?
Housing Prices and Affordability in Kelowna
Kelowna’s real estate market has seen substantial growth in property values over the past decade. Even in areas like Glenmore and Rutland, which historically offered more budget-friendly options, median home prices are now around $970,000 and $830,000, respectively.
For a clearer perspective, here are median home prices for various neighborhoods in the Okanagan area in 2024: Take a look at the photo above.
These prices highlight the rising cost of home ownership and inflation, which can feel out of reach for many residents. According to data from 2021, around 40.7% of Kelowna’s population can afford homes over $395,000, with affordability becoming a critical factor in determining whether to buy or rent.
Updated Rental Market Data
With homeownership costs escalating, some residents may consider renting as an alternative. Here’s an overview of current rental rates in Kelowna based on property type and location:
Condos: A studio in a low-rise building starts around $1,500 monthly, while a 2-bedroom condo in a downtown tower ranges from $2,500 to $2,900.
Single-Family Homes: In Lower Mission, a 3-bedroom home typically rents between $2,300 and $3,300, while in West Kelowna, prices range from $2,500 to $3,400 for similar properties.
Duplexes: A 2-bedroom duplex in Glenmore rents around $2,050 to $2,400, with prices varying based on neighborhood and amenities.
These rates illustrate that renting, while often cheaper than buying, still comes with high costs, especially in sought-after neighborhoods. The average rent for a two-bedroom home in Kelowna can range from $1,900 to over $3,000 depending on location, making affordability a challenge on both fronts.
Buying vs. Renting: Monthly Payment Comparison
For potential buyers, assuming the rate you get is at 5% for a 25-year term. Here’s a breakdown of estimated monthly mortgage payments for various loan amounts, this is not assuming any additional fees like CMHC insurance for down payments less than 20%. There is also the option to extend amortization to over 30 years.
$300,000 Loan: $1,754 per month
$500,000 Loan: $2,923 per month
$750,000 Loan: $4,384 per month
$1,000,000 Loan: $5,846 per month
Curious What You Can Buy for These Amounts? Start Here
When comparing these monthly payments to typical rental rates, the decision to buy or rent depends on financial capacity and long-term plans. For example, renting a 2-bedroom condo downtown may cost $3,000 monthly, similar to the mortgage payment on a $500,000 loan. However, homeownership is not for everyone, renters avoid the upfront down payment and maintenance costs associated with homeownership.
On the flip side when you buy a home, each mortgage payment builds your equity and positions you for future financial growth as your property’s market value increases. Instead of paying rent toward your landlord's mortgage, investing in your own home allows you to secure an appreciating asset, potentially yielding substantial returns over time and the ability to pull money out if it in the future.
Kelowna's Growth and the Demand for Housing
The sustained growth in population is reshaping Kelowna’s housing market. Driven largely by international migration (+40,271 newcomers to BC in early 2024) and high demand for quality of life, Kelowna is expected to continue attracting residents. Although the province has experienced a slight decline in interprovincial migration, Kelowna remains appealing to those looking for a balanced lifestyle, with many able to work remotely.
Conclusion: Is It Better to Buy or Rent?
The choice to buy or rent in Kelowna ultimately depends on individual financial circumstances and lifestyle preferences. Buying may offer long-term stability and the opportunity to build equity, especially as property values continue to rise. However, the significant upfront costs and high monthly payments mean that renting could be more feasible for those seeking flexibility or planning to stay in the area short-term.
Whether you're a prospective buyer, current homeowner considering renting, or an investor evaluating rental income potential, understanding the market is key. For a personalized analysis to help determine if buying or renting makes more sense for you, feel free to reach out.
Reach out if you have any questions, or if there is anything we can do for you.
Mark and Maddie 778-744-0872
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