The apartment rental market in Ottawa is looking very strong in 2018. Primecorp Property Management is finely tuned into the shifting elements of this dynamic market in our ongoing efforts to ensure that the properties we professionally manage always stand out as highly desirable places to live, for the growing number of individuals looking to rent in Ottawa.
Huge Drop in Ottawa Apartment Rental Vacancy Rate by End of 2017
Toward the end of 2017, the rental market in Ottawa tightened up considerably faster than many experts had been anticipating:
A new report on Ottawa’s rental market released by the Canada Mortgage and Housing Corp. found that the vacancy rate had dropped from three per cent in 2016 to 1.7 per cent this year, while average rent rose 2.1 per cent to $1,113… That bucked the trend the CMHC had predicted only a few months earlier. In its fall 2017 housing outlook report, the agency forecasted the vacancy rate in Ottawa would hold at around three per cent this year and climb to 3.4 per cent by 2019. – Ottawa Business Journal
Ottawa Rental Market off to a Very Strong Start in 2018
In 2018, Ottawa continues to be one of the fasted growing apartment rental markets across Canada. There are several factors contributing to this shift in market conditions, including an improved local economy, more local amenities across the National Capital Region and the prospect of the new LRT line set for launch later in 2018:
Nov. 2 is the new date for the Rideau Transit Group to turn over a completed Confederation Line LRT to the City of Ottawa. – Ottawa Citizen
Another contributing factor is the desire for considerably more people to rent as opposed to locking into a long-term mortgage. Last July, the Bank of Canada raised its key overnight lending rate, for the first time in seven years. The central bank raised its key rate two more times since then, directly impacting mortgage rates, especially variable rate mortgages. A series of new mortgage regulations, such as a stress test for new applicants, even if they have a down payment of more than 20 per cent, is making it harder for many Ontario residents to enter the housing market, especially for those looking to buy their first home.
As Ottawa’s tech sector continues to grow and the federal government has shifted into a hiring mode, millennials are drawn to Ottawa for the employment prospects, the amazing quality of life that can be had in the capital, and a lower cost of living compared to Toronto and Montreal. According to popular rental listing site, Padmapper:
In January, Ottawa had the second fastest growing one bedroom rent in the top ten largest markets with a unit going for an average price of $1,120 per month. [Padmapper Spokesperson, Christal Chen] attributes the increase to growing demand for Ottawa combined with a spike in new, luxury apartment buildings entering the market. “Definitely younger people are moving here and then people are also being priced out of Toronto and Montreal and they are looking to Ottawa for cheaper costs of living and that’s increasing demand overall,” she said. – CTV News
High Demand Creating a Surge in New Purpose-Built Rental Units
While the Ottawa apartment rental market was great for landlords in 2017, competition will likely heat up throughout 2018 and going into 2019. Due to the strong economy, and an increased demand for quality rental units, more real estate developers are looking to enter the market than ever before.
Developers certainly seem willing to jump on the trend. According to CMHC data, 2017 saw 1,065 new purpose-built rental units started — a 65.6 per cent increase over 2016 — while condo starts dropped to 487 from a high of 2,412 in 2014. (CMHC’s numbers don’t reflect any of the major developments that, over the last few years, switched over from condos to rentals.) – Ottawa Business Journal
Primecorp’s Recipe for Successful Property Management: Create a Win-Win Environment
Due to the expected increase in competition in the Ottawa rental market, property owners should consider hiring an experienced property management company, with a proven track record of solid management practices and dedication to finding ways to make their valuable assets stand out among the many rental options available.
Our professional property management team, led by Jennifer Davies, will be able to work with owners to find solutions to the daily challenges of keeping everything running smoothly. We are also constantly looking at ways to offer unique amenities to our tenants, while seemlessly taking care of the many moving parts involved in managing residential rental units and multi-residential buildings. If you are interested in learning more about our property management services and how we can make your apartment building stand out in the Ottawa rental market, please contact us at Primecorp… we’d be happy to hear from you!