Ottawa Rental Vacancy Increases as New Completions Continue to Grow

Urbanation released its Q4-2024 Rental Market Results for Ottawa:

• The Ottawa rental market experienced some easing in Q4 but largely remained stable as new supply continued to grow.
• Purpose-built rental completions reached a recent high of 3,692 units in 2024, increasing 6% from the 3,494 units completed in 2023.
• Net absorptions of new purpose-built rentals totaled 568 units in Q4, while completions in Q4 totaled 1,001 units.
• Vacancy rates for new purpose-built rentals increased to a post-pandemic high of 2.6%, up from 2.1% in Q4-2023.
• Purpose-built rents in new buildings were unchanged quarter-over-quarter at $3.25 psf ($2,452 for 754 sf), which represented a 4.4% annual increase.
• Purpose-built rental completions are projected to rise to a multi-decade high of 5,236 units in 2025, a 42% increase from in 2024. 
• However, with rental construction starts falling 20% annually in 2024 to 2,709 units (a 46% drop from 2021), supply is set to tighten significantly in the years ahead.
• The 9,589 purpose-built rentals under construction in Ottawa as of Q4 represented an 11-quarter low.
• A total of 115,277 purpose-built rentals were proposed for development as of Q4, of which 69,354 (60%) were approved.
• In the secondary condo rental market, lease transactions fell to a four-year low of 977 units in 2024 as new supply remained very limited.
• However, more condo rentals were listed for sale last year, pushing up active inventory at year end 38% annually to 139 units, equal to 1.7 months of supply.
• Average condo rents decreased 1.7% quarter-over-quarter while increasing 2.9% year-over-year to $2.88 psf ($2,354 for 818 sf).