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Ottawa's rental segment is shifting to a higher gear

by Ephraim Vecina on 14 Aug 2018

Ottawa’s residential rental market has recently seen marked increases in demand and price points along with a considerable decline in vacancy levels, according to a new study conducted by the Ottawa Citizen.

Official numbers for this year have yet to come out, with the CMHC’s Rental Market Report due to be published this fall. However, a trend can be outlined from recent years’ figures: In 2017, the Crown corporation reported 1.7% vacancy for rental apartments in the province, much lower than the 3% seen in 2016.

The CMHC noted that the 2017 number was the lowest vacancy level seen in the city in 6 years. The report added that the average rent rate for a two-bedroom apartment in 2017 was $1,232, up from the previous year’s $1,200.

Ottawa-based Blue Panda Realty real estate professional Steve Peippo said that he has observed intensified competition for rental spaces in recent months, which occurred amid a backdrop of surging asking prices.

“It’s almost more challenging to find a rental than it is to find a purchase. And I’ve seen people get quite desperate,” Peippo stated.

Ottawa MLS data covering both May 2017 and May 2018 indicated a 14% increase in the average rental “sold” price of two-bedroom, one-parking spot residential rentals, from $1,739 to $2,018.To compare, rent rates for the same property type grew by only 5% in the 2015-2016 interval, and 2% from 2016 to 2017.

Read more: Home ownership is more affordable than rent in these Toronto locales

Fresh data from search portal Kijiji Canada seemed to support these observations: The average rental price in the marker increased by 7% year-over-year in June 2018. In the same time frame, the number of Ottawa-Gatineau rental “wanted” ads on the platform grew by 17%.

“We do see activity on Kijiji as a barometer for what’s happening in the Canadian real estate industry,” head of real estate and jobs at Kijiji Canada head of real estate and jobs Greg Abramowitz said. “There’s quite a lot being said in those numbers about the market in general and the competitive nature of it.”

Meanwhile, rental listing platform PadMapper (which only covers units already on the open market) reported that two-bedroom rentals in Ottawa fetched an average rate of $1,500 per month in June 2018, representing a 15% year-over-year increase and 3% from May.

 

Related stories:
Evidence suggests rent control is misunderstood
Millennials and the economy continue to push prices upward – report

 



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