For some time now, Ottawa has been an ideal place to rent an apartment. The diverse city landscape and yearly influx of students, newly immigrated, and young professionals (41% of apartment renters are between the ages of 25 and 44 – CMHC Housing Market Report) allows for constant shifting and growth in the rental market. While vacancy rates have gone down in the past year, Ottawa still has a higher vacancy rate than the average across Ontario. With very few new builds in Ottawa, the number of available rental apartments has actually gone down by 113 units due to either demolition or the changeover to condominiums.
Types of Apartment Rentals in Demand in Ottawa
The types of rentals in the Ottawa market that are in demand have changed in recent years. Ottawa has seen a move toward building more condominium apartments and having them rented out by investors than purpose-built rental apartments. Condos can gather rents generally 25% higher than apartments, but due to market dynamics they are comparable with apartments because they may not be able to reach their target rent and also there are more value-added amenities within a condo development.
Apartment Rental Pricing in Ottawa
While rent increases yearly due to property costs and inflation, in 2014 rents increased slightly but still remained below the national average. One bedroom apartments are the most sought after rental dwelling type, with most renters opting for a one bedroom over a bachelor. Two bedroom apartments are steadily rented because they are harder and harder to come by. Three bedroom apartments have seen the greatest rent increase and highest vacancy rate in 2014, while many people looking for more space and amenities opt for townhouses or buying a home.
Ottawa Apartment Vacancy Rates
Prospective renters are finding higher vacancies in Nepean, Sandy Hill, Vanier, and Lowertown and also in pre-1940s and post-2005 buildings. Older (pre-1940) and newer (post-2005) have higher vacancy rates due to the fact that pre-1940 constructed buildings have limitations in regards to upgrades and modernization that may keep prospective tenants at bay, while post-2005 constructed buildings offer upgrades and amenities that drive the rents too high. The lowest vacancies are being found in Ottawa’s Gloucester, Downtown, Chinatown, Hintonburg, and Westboro neighbourhoods. The highest rental increases are in the Hunt Club/South Keys and Vanier neighbourhoods (CMHC Rental Market Report).
Home buying in 2014 was on the rise and then saw a dip at the end of the year. First time home buyers are on the decline with many 25-44 years old opting for a rental townhouse or condominium. Townhomes rent for an average of 20% more than the typical apartment.
Every neighbourhood in Ottawa is unique and offers its own rental atmosphere, amenities, benefits, and community. For more information regarding vacancies at any of our properties please visit Primecorp Property Management.