Kelowna’s saturated condo market being blamed in part to short-term rental restrictions – Okanagan

When James  Milacic bought a condo unit at the Playa Del Sol building in Kelowna, B.C., two years ago, he bought it for one reason and one reason only.

“I bought it strictly to do short-term rental to make a profit,” Milacic said.

However, several months in, the B.C. government restricted  short-term rentals, even in buildings like Playa that were built and zoned for that purpose.

Milacic decided to list the property and sell but with a flood of condos up for sale, it went nowhere.

“During the time of me listing it, which was for six months, my realtor told me there was not a single phone call of interest,” Milacic said.

Milacic is far from alone.  In fact, his is one of nearly 20 units currently listed for sale at the Playa building.

“They’re not even getting showings right now,” said Leanne Weintz, who owns Okanagan Vacation Rentals Management and is a licensed realtor with two of the listings in the building.

“The price point,  the owners continue to drop them but with such a flood in this building of units available and no draw, it sounds terrible, there’s no draw to purchase in this building.”

The units for sale at the Playa building units are contributing to an increasingly saturated condo market in the Kelowna area.

According to the Association of Interior Realtors, the Central Okanagan boasted a condo inventory of 893 units in August 2025 compared to 755 in the same time period last year.

The increase is blamed on several factors.

“I think the impact of short term rentals or the ban on them, that’s part of it, “said Kelowna realtor Tamara Stone. “I think during COVID, everybody wanted to be here and there were so many new buildings that were built that are now completing and people are not renting them out. They’re trying to sell them.”

But selling condos isn’t the only challenge. So is renting them.

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With many new rental buildings now completed, the vacancy rate has soared and landlords are struggling to secure tenants, offering all kinds of incentives, such as reduced rents.

Milacic finally managed to find a renter, at least for the next few months but the rent, he said, barely allows him to break even.

“It covers my mortgage and my strata fees and that is it,” he said. “So I am still technically under. I’m still losing money.”

Milacic is pleading for the province to take a hard look at the restrictions in the purpose-built short-term rental buildings and the negative impact.

‘I don’t know if they thought about it but this is definitely a consequence of their action,” Milacic said.

Last month B.C. Minister of Housing Christine Boyle said the restrictions are having the desired effect in creating more long-term housing as vacancy rates rise across the province.

In Kelowna, the vacancy rate increased from 1.7 per cent at the end of 2024 to 4.5 per cent as of June 2025.

 

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