Ottawa Rental Construction Falls in Q3 Despite Low Vacancy and Rising Rents

A brief summary of Urbanation's latest Ottawa Rental Market Report findings for Q3-2024:

• The Ottawa rental market remained strong and steady in the third quarter across the 109 rental buildings totaling 17,487 units built since 2000 and tracked quarterly by Urbanation.

   

• New purpose-built completions totaling 1,218 units were surpassed by net absorptions totaling 1,235 units as demand continued to outpace supply. 

   

• As a result, vacancy rates were held to only 1.6% in Q3 (unchanged from Q2 and up only slight from 1.5% a year ago) and average rents rose 7.5% annually to $3.25 psf ($2,417 for 743 sf).

   

• A total of 813 rental units started construction in Q3, down 18% from a year ago. Year-to-date construction starts of 2,416 units represented a 10% decline over the same period last year and a 32% drop from the recent high of 3,546 starts in the same period during 2021. 

   

• The challenging economic environment for new rental development caused the total number of rentals under construction to fall to a nine-quarter low of 10,132 units. 

   

• In the secondary condo rental market, lease transactions fell 15% annually to 292 units due to a lack of new completions. 

   

• Condo rents were largely unchanged at an average of $2.92 psf, slipping 1.4% from the record high a year ago.