Ottawa Rents Increase in Q2 as Vacancy Declines

August 10, 2022:  Urbanation Inc., the leading source of data and analysis on the condominium and rental apartment markets since 1981, released its Q2-2022 Ottawa rental market results.

After many years of providing site-specific consulting services to property developers in Ottawa, Urbanation launched its inaugural Ottawa Rental Market Report in Q4-2021.

Key Highlights of the latest Q2-2022 Report include:

• Urbanation tracked 48 new purpose-built rental apartment projects completed across Ottawa since 2016, totaling 7,556 units.

• The average vacancy rate in new buildings completed since 2016 declined to 18.2% in Q2-2022 from 23.6% in Q1-2022.

• Vacancy within stabilized rental buildings (i.e. those that have achieved 95% lease-up) averaged 2.0%, down from 4.4% in Q1-2022.

• The average surveyed rent for available purpose-built units during Q2-2022 was $2.96 psf ($2,241 for 757 sf), increasing by 3.9% over the Q1-2022 average of $2.85 psf ($2,174 for 764 sf). Rents generally excluded parking and lockers, averaging $165 and $45 per month, respectively.

• Purpose-built rents averaged $3.45 psf ($1,605 for 465 sf) for studios, $3.17 psf ($2,079 for 656 sf) for one-bedrooms, $2.72 psf ($2,561 for 943 sf) for two-bedrooms, and $2.40 psf ($2,752 for 1,147 sf) for three-bedroom units.

• In the secondary condo rental market, the 279 lease transactions via MLS during Q2 represented an 11% annual decline from the record high reached in Q2-2021, but rose 25% above the 10-year average.

• Market conditions for condo rentals tightened during the second quarter with the average time on market declining to 26 days, down from 29 days in Q1-2022 and 32 days a year ago in Q2-2021.

• The average condo rent psf reached $2.70 ($2,165 for 803 sf) in Q2, rising 10% from an average of $2.45 in Q1-2022 ($2,081 for 850 sf). A 73% share of condo rentals in Q2 included parking.

• The average monthly condominium rent of $2,165 increased 5.9% year-over-year in Q2-2022 to reach a new high.

• The inventory of new purpose-built rentals under construction in Ottawa continued growing to a multi-decade high in Q2-2022 of 28 projects totaling 5,615 units, up from 5,387 units in Q1-2022 and 4,258 units in Q4-2021.

• Urbanation identified 84,211 proposed apartment units (in 216 projects) that had not yet started construction across the City of Ottawa, increasing from a total of 78,332 units as of Q1-2022 and 68,182 proposed units as of Q4-2021. This included 21,253 units in projects that have been identified as purpose-built rental, up from 20,121 proposed rentals as Q1-2022 and 15,006 proposed rentals as of Q4-2021. A 40% share of planned rental units that had not yet started construction had received some level of planning approval as of Q2-2022.

     

“The Ottawa rental market is returning to conditions experienced prior to the pandemic, driven by strong fundamentals from recovering population growth, an expanding local economy, and deteriorating homeownership affordability caused by rising interest rates. Despite seeing a recent boom for new rental completions in recent years, Ottawa rental vacancies are trending down, supporting further growth in rents.”      Shaun Hildebrand, President of Urbanation.