High vacancy rates prompting landlords in Kelowna to offer free rent, move-in incentives to attract tenants
In the heart of British Columbia, the city of Kelowna has seen a significant shift in its rental market over the past year. This transformation, according to James Moore, manager of the housing policy and programs department with the City of Kelowna, is primarily due to low vacancy rates and high prices that have long been a problem in the community.
Recent years have seen builders in Kelowna focusing on the construction of condominiums. However, this trend is expected to slow down over the next couple of years due to broader economic conditions, interest rates, and construction costs.
A ray of hope for renters in Kelowna comes in the form of government incentives aimed at boosting a stagnant market. As a result, the influx of rental units has increased, leading to a significant rise in the city's vacancy rate. In June 2024, Kelowna's vacancy rate stood at 1.7%, but by June 2025, it had risen to 4.5%.
This rental boom has turned the tables, making landlords compete for tenants instead of renters competing against each other for housing. Some landlords are offering major incentives, such as up to two months of free rent, move-in bonuses, incentives on parking, and incentives on internet, to attract renters. Troika Developments, for example, is offering such incentives at their newest purpose-built rental building called '285 Dougal'.
Troika Developments is not alone in this shift towards rental construction. The municipal Kreisbaugesellschaft Tübingen, a company that currently focuses 85 percent of its construction projects on rental apartments, has already renovated 70 percent of its 2,400 rental apartments. Similarly, Kelowna, B.C. added approximately 1,100 new rental units in 2025.
Despite this progress, Moore stresses that if the construction of new purpose-built rental units slows down, the vacancy rate will go back down to an unhealthy level, and more price growth will be seen. To prevent this, Kennedy, another city official, emphasizes the need to continue pushing and engaging with policy makers to deliver an adequate amount of housing to keep the vacancy rate between 3-5%.
The increased vacancy rate and lower rental costs have undoubtedly benefitted renters in Kelowna. As the city continues to grow and evolve, it's clear that the rental market will remain a key focus for city officials and developers alike.
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