For the first time in years, Penticton has a new rental apartment building.
Singla Brothers Holdings has officially opened a new six-storey, 46-unit apartment building at 472 Winnipeg St. Most are two-bedroom suites, with 12 one-bedroom units.
The opening comes as Penticton’s apartment rental vacancy rate sits at less than three per cent.
Owner Paul Singla said when construction began a few years ago, they were considering marketing the suites as self-owned condominium units. However, those plans changed as the recession hit.
“The family made the decision that we have to keep it residential,” he said. “So now we put a 10-year covenant on it and we are not selling for 10 years for sure.”
Singla said even after the covenant expires, they will likely keep the building as rental units. Singla Brothers owns several rental properties throughout Penticton and elsewhere in the Okanagan.
Although construction of the Winnipeg Street building was put on hold at different stages, due to the economic downturn, Singla said they had always intended to complete the project.
“So many developers left town and they never came back, but we’ve got enough strong family backing,” he said. “That’s why we’re standing on our feet and the bank and the city are helping us.”
The concrete-construction building includes underground parking. There are five different floor plans.
The public response has been almost immediate. Singla said 25 units were rented out in the first week alone.
Singla said he is very pleased with the initial reaction to the higher quality apartments. Rents range from $750 to $1,350 a month.
Sarena Teakles, senior market analyst with Canada Mortgage and Housing Corp., said according to CMHC’s spring market survey the Penticton apartment vacancy rate stood at 2.9 per cent – down from 3.3 per cent a year ago.
“That has come down from where we saw it at the peak of the recession,” she said. “For about the past three years we have seen vacancy rates decline.”
The Penticton peak for the fall rate reached 4.8 per cent in 2011.
Teakles said the addition of 46 more units to the rental pool will help address any pent-up demand.
However, she said with about 2,000 rental apartments in Penticton, the Singla development only adds about 2.5 per cent to the overall total.
“It’s not a huge amount, but it will definitely (help),” she said. “I think most markets right now do have a certain level of vacancy limits.”
Teakles added there is still a lingering weakness in the resale market for apartment condominiums.
“We’re still sitting in a buyers’ market in Penticton,” she said. “That means the demand for buying housing really isn’t there.”
Singla Brothers’ new building is called Ashley’s Dream, in keeping with a tradition of naming developments after their daughters and other family members. Ashley Avinashi is now a realtor in Vancouver.
Meanwhile, Singla noted the company has plans for more apartment buildings, including two projects in Kelowna and another in Vernon.