The University of British Columbia, Okanagan recently announced its commitment to a second campus, one located in the downtown core of Kelowna. In late July, a revamped version of the project – which was initially brought forward in 2020 – was approved by Kelowna city council. Kelowna, with its relative affordability, is already recognized as a top emerging market in British Columbia. The addition of this campus is almost guaranteed to create and drive future growth of the downtown area and increase its desirability for residency – and for investment.
UBCO campus expands before breaking ground
In 2020, the University of British Columbia made public their plans to build a second campus for the school in the heart of downtown. Initially a 34-storey mixed use building that combines academic and student housing, the project was expanded into a 46-storey project with 500 residential housing units. The development features a proposed tower at the intersection of Doyle Avenue and St. Paul Street, and when built will be the tallest tower in the province outside of Greater Vancouver. Construction for the new building is expected to begin in the fall. Seattle-based architectural firm Olson Kundig, whose portfolio includes Mission Hill Winery in neighbouring West Kelowna, is behind the building's design. The tower will feature a grand atrium on the main floor, eight storeys of academic space, cutting-edge simulated hospital wards to train nursing students, a public art gallery, a public engagement suite and a variety of other learning areas. The project and its subsequent expansion speaks to the need for more housing, and more affordable housing, for younger people in the area. The student housing wait list at UBCO’s current campus has grown from 500 students in need to 1,300 over the past two years, which means more than 10% of its approximately 12,000 student body are in need of housing. A one-bedroom dorm at the University’s current residences costs about $1,200 per month in rent, while an apartment of the same size off-campus could run over $1,800 per month. Housing is desperately needed for students in the area.
Kelowna: a top emerging market
Canada has many smaller markets with high-growth potential that offer solid fundamentals and well-priced investment opportunities. Home to over 140,000 people, Kelowna is one of the fastest-growing metropolitan areas in Canada by population. The Okanagan, which contains the municipalities of Kelowna, West Kelowna, Lake Country and Peachland, has grown 14 per cent since 2016 according to Statistics Canada and is the fastest growing census metropolitan area in Canada. These numbers make it no surprise that the area was identified by Fundscraper as one of the top three emerging real estate markets in the country. The region has a high employment rate and strong construction, with a robust healthcare economy and a strong retail sector. Beyond that, the part that perhaps makes the area most enticing is bang for buck. The Okanagan can generally provide more per dollar for homebuyers than in the Greater Vancouver area.
According to Association of Interior Realtors Real Estate Board, the benchmark price at the end of Q2 for the Central Okanagan was $1,112,400. This is a significant increase from the previous year where the price of a single-family home in the Central Okanagan was around $923,500 in Q3 of 2021. That means buyers who entered in the market in 2021 have already seen a marked increase on their home’s resale value. There are just over 30 new developments under construction in Kelowna, which will bring 1502 units to the market before the UBCO tower even begins construction.
Demand is still high for emerging markets like Kelowna. Housing is needed and the region offers stronger market fundamentals at a lower price. Projects such as the new UBCO campus speak to the need for increased development and more affordable options for those who choose to leave the Lower Mainland. If the tower is completed, it will be the first of many high rises to be approved in the area and will likely signal a change of zoning nearby. Investment in an emerging market like Kelowna is an opportunity to capitalize on the growth of the community at its early stages of increasing density.