The Single-Family Dream Is Becoming the Townhome Dream
Why Kelowna’s Housing Mix Matters More Than Ever
For generations, the dream was simple — a single-family home in Kelowna with a yard, a garage, and a little space to call your own.
But as Kelowna’s real estate market continues to evolve, that dream isn’t disappearing — it’s transforming.
Across B.C. and here in the Okanagan, most new homes being built today are multi-family — apartments, purpose-built rentals, and townhomes.
Detached homes are becoming harder to build and, as a result, harder to buy. This is a brief look into the Kelowna real estate market in 2026 and beyond.
More Homes, But Fewer Ownership Choices
We often hear that “building more homes will fix affordability.”
That’s only half true.
Yes, Kelowna needs more housing — but the type of housing we build determines whether residents can actually own a home, not just rent one.
Take the Capri Mall redevelopment on the 1200-block of Pacific Avenue.
On October 6, 2025, Kelowna City Council supported a rental-only rezoning for a proposed 20-storey, 157-unit tower.
Developers received a five-storey height bonus and 76 additional units — a direct incentive for converting from mixed-use ownership to rental-only.
Those homes will never enter the resale market — and they’re not meant to.
From a planning standpoint, that makes sense. With high borrowing costs and tight margins, purpose-built rentals are among the few projects financially viable right now.
But for buyers trying to build equity in Kelowna, it’s a sign that “more homes” doesn’t always mean “more affordability.”
Instead, we’re seeing more rentals and fewer ownership opportunities.
Governments, Incentives & the “Missing Middle”
Townhomes in Kelowna represent the “missing middle” — that sweet spot between high-rise apartments and detached homes.
They offer ground-oriented living, private entrances, and manageable price points that appeal to both first-time buyers and downsizing families.
Despite policy support, however, townhomes remain a smaller share of new construction in Kelowna.
Builders continue to focus on large-scale apartment complexes or high-density infill because those projects are easier to finance and faster to approve.
As taxpayers, we play a role in this cycle too.
We want low property taxes, which encourages cities to approve developments that generate more revenue per acre — typically rental high-rises.
It’s a short-term win that can limit long-term housing diversity.
A Personal Moment That Hit Home
The other night, my kids — six and eight — told me they planned to live with us until they’re 40.
At first, it was a sweet, funny moment. But the more I thought about it, the more I realized — they might be right.
If Kelowna housing affordability continues on its current path, owning even a small home could become increasingly out of reach for the next generation.
We’re building more homes, but not necessarily more ownership opportunities.
What’s Actually Being Built in Kelowna
According to CMHC housing data, a high proportion of new homes in the Kelowna CMA (2024–2025) are multi-unit apartments or rentals, while detached homes make up a much smaller share of total construction.
This mirrors national trends:
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Rising construction costs and limited land make detached projects expensive.
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Higher interest rates tighten builder financing.
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Government incentives favour rental density over ownership supply.
With building permits declining this year, we’re now facing a slowdown in ownership-oriented projects.
That might ease competition temporarily — but as the supply pipeline dries up, prices could spike again once demand rebounds.
Ironically, that could push governments to double down on rental developments instead of supporting smaller, community-based ownership projects.
Why Detached Homes Still Matter — and Why Townhomes Are the New Reality
Single-family homes remain the strongest long-term investment in Kelowna real estate.
Land is limited, and detached homes — especially in established neighbourhoods — tend to appreciate consistently.
That said, townhomes are becoming the smartest entry point for buyers who want to build equity without overextending.
Townhomes offer:
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Private entrances and outdoor space
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Lower price points than detached homes
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Simpler upkeep than condos
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Access to established neighbourhoods with good schools and amenities
In land-constrained markets like Kelowna, townhomes often outperform condos in appreciation because they fill that “missing middle” gap.
What to Expect by Neighbourhood
Downtown & Central Kelowna:
Expect more high-rises and purpose-built rentals — they’re the most financially viable under current policy.
Mature Neighbourhoods (Glenmore, Rutland, Lower Mission):
Anticipate Bill 44 infill — laneway homes, duplexes, and four-plexes — which could bring new ownership options for buyers seeking smaller-scale homes.
Future Growth Areas (Black Mountain, Upper Mission, Southridge):
Still home to detached developments, but on smaller lots and at higher prices due to land scarcity and development costs.
Kelowna’s housing future won’t be one-size-fits-all — and that’s why smart planning matters now more than ever.
Condos, Rents & the Investor Reality
If you’re watching the cranes downtown and expecting Kelowna condo prices to drop, don’t hold your breath.
Most of those projects are purpose-built rentals — they’ll never hit the resale market.
Rents may soften slightly as more units open, but ownership housing won’t suddenly become cheaper.
Real estate investors could feel the squeeze as institutional landlords offer incentives that smaller landlords can’t match.
That’s good for renters — at least temporarily — but it doesn’t translate into broader affordability.
The Big Picture
The single-family dream isn’t gone — it’s evolving.
Townhomes have become the bridge to ownership and, for many, the new dream itself.
They’re attainable, limited in supply, and increasingly valuable in a city dominated by rentals.
For most buyers, success in Kelowna’s 2025 housing market means adapting, not waiting.
Final Thoughts
More housing is always good — but more of one kind (especially rentals) doesn’t guarantee affordability.
Kelowna needs a better balance between rental supply and ownership opportunity.
Detached homes will always anchor the market, but townhomes are now the most strategic step toward ownership.
That’s not lowering your dream — it’s adapting it to reality.
Frequently Asked Questions
Are townhomes a good investment in Kelowna?
Yes. Townhomes in supply-constrained markets like Kelowna typically appreciate faster than condos and provide better long-term resale value due to limited supply and strong family demand.
Will condo prices drop as more rentals are built?
Not significantly. Most new apartment construction is purpose-built rental, meaning those units won’t enter the resale market. Rents may decline slightly, but ownership prices will remain stable.
How does Bill 44 affect homeowners?
Bill 44 enables more small-scale density (duplexes, triplexes, and fourplexes) across Kelowna, which can help modestly increase supply — but zoning changes take time to affect prices.
Where can buyers still find detached homes?
Detached options remain in areas like Black Mountain, Upper Mission, Glenrosa, and parts of Lake Country, though prices are higher. Working with a local REALTOR® helps identify hidden opportunities and upcoming developments.
Mark and Maddie Coons
Selling Kelowna Real Estate Group
Tel: 778-744-0872
