Investment properties in Ottawa are 20% less expensive than the national benchmark. Owing to economies of scale, large complexes typically sell for about $235k/unit; whereas smaller structures sell for about $350k.
Ottawa Investment Property Price Data at a Glance
According to the most recent data available as of Q1 2023, the median per unit price of investment properties in Ottawa sold during the previous 12 months were as follows.
Note that the cost per unit tends to decrease as the number of units in the structure increases. Accordingly, the per unit cost has been set out here based on the number of units in the structure.
| Duplex: $379,000/unit | SD:$67k | ($279k-$574k) |
| Triplex: $355,000/unit | SD: $111k | ($193k-$510k) |
| Fourplex: $337,000/unit | SD: $127k | ($200k-$625k) |
| Five unit - ten unit: $313,000/unit | SD: $73k | ($196k-$435k) |
| Eleven unit - twenty unit: $235,000/unit | SD: $39k | ($188k-$288k) |
| Twenty one units +: $226,000/unit | SD: $44k | ($144k-$282k) |
Source: OREB, RealTrack, johncastle.ca
The data in the graph above pertains to class B properties (non-premium and non-luxury). Class A properties in buildings with a larger number of units (say, 20+) generally cost about $330k-$400k/unit, with most selling around $350k. As with class B properties, as the number of units in the investment decreases, the cost per unit rises. However, with class A properties, that relationship is more pronounced. Moreover, the per unit cost is also more sensitive to differences in quality and location. As a result of that variability, a ten unit class A building in, say, Hintonburg may sell for as little as $500k/unit. Whereas a duplex in, say, Westboro or the Glebe could sell for over $1M/unit.
Ottawa Investment Property Price Data by Neighbourhood
In this section we examine the per unit price of investment properties in Ottawa across various Ottawa neighbourhoods.
Within Ottawa, there are four neighbourhoods where the price of an investment property is regularly markedly higher than it would be if it were located in another neighbourhood: Income properties in Westboro and the Glebe are the most expensive. While those in the center of Vanier and Carlington are the least expensive. Other neighbourhoods command premiums and suffer discounts, but none do so as saliently as these neighbourhoods do. For that reason, we’ll focus on those four here.
Ottawa $362k/unit Median
Vanier $242k/unit Median
Glebe: $514k/unit Median
Westboro: $420k/unit Median
Carlington: $216k/unit Median
Note that as the number of units in a structure increases, the relevance of location on the price of the structure tends to decrease; eventually settling at a point where the relationship between price and location is mostly (but not entirely) a function of the effect that higher rents (owing to location) have on net income. In contrast, with smaller structures, investors appear willing to pay a considerable premium for location that goes beyond the effect of the additional rent on the bottom line. There are three compelling explanations for this difference.
- Location only affects land cost. With the higher cost of premium land spread over more units, the cost per unit decreases. If that discount isn’t passed on at re-sale, then buyers would have more reason to build their own investment over buying an existing one.
- Delinquencies are a greater hazard for the small investor. A single unit in a smaller investor’s portfolio will be a larger share of her portfolio than a single unit in a larger investor’s portfolio. Consequently, a single delinquent tenant is a bigger problem for the smaller investor than it is for the larger investor. Owing to the law of small numbers, delinquencies manifest as irregular, and challenging, episodes in the management of the small investor’s portfolio. Whereas, in the management of the larger investor’s portfolio, delinquencies are a predictable ongoing cost of doing business. In general, the risk of delinquency is inversely related to the desirability of a location. That reduced risk seems to be worth more to the smaller investor. Moreover, the delinquency history in a smaller structure is rarely as clear as it is in a larger structure. There’s less opportunity for due diligence in the purchase of a smaller structure (the record keeping isn’t as strong and the conditional periods are shorter). Consequently, a history of delinquency is harder to uncover. Moreover, the seller of a smaller investment property is better able to conceal delinquencies (usually by blaming poor record keeping). Accordingly, the smaller investor takes a more conservative estimate of the delinquency risk. Having said all of that, it’s been my experience that smaller investors imagine the relationship between location and delinquency to be stronger than it is.
- Smaller investors are more likely to self manage and to live the experience of managing their investment. As such, smaller landlords pay an intangible cost for renting to difficult tenants. Smaller landlords often envision properties in desirable locations as more attractive to tenants who may be easier to manage. Accordingly, the smaller landlord may be willing to pay a larger premium for an investment in a desirable location.
Investment Property Prices in Ottawa Compared to other Cities
In this section we look at the benchmark price of condominiums in Canada’s major metros. All things being equal, the market value of a unit in a new condominium is similar to the market value of a unit in a new apartment (since the costs are similar, if the two values become detached, builders will begin building the more valuable, and therefore more profitable, product; the additional supply brings the values back into alignment), As such, relative differences in condominium values serves as a reliable proxy for relative differences in apartment values.
Vancouver: + 34%
Toronto: + 33%
Ottawa: - 20%
Montreal: - 39%
Calgary: - 47%
Edmonton: - 66%
Ottawa Investment Property Price Data by Building Age
In this section we examine the per unit price of investment properties in Ottawa across structures of various ages.
Apartment condominiums provided the largest data set. From that set we pulled the following median prices.
- 0-2 years: $700k
- 3-4 years: $638k
- 5-7 years: $581k
- 11-14 years: $595k
- 15-20 years: $580k
- 21-30 years: $500k
- 31-40 years: $390k
- 41-50 years: $334k
Some larger luxury units released in the 2010s result in median figures that depart from the trend. In order to more clearly depict the relationship between age and price, I’ve plotted the data above into an exponential regression (r=0.99). Note that the fit on a linear regression was considerably weaker (R=0.9)
The logarithmic relationship of age and value has also been observed by MPAC. Who observed the sharpest declines early in the lifespan of the structure.
Note that the same pattern doesn’t apply to all structures. For example, you’d expect a new 20+ unit apartment building to sell for approximately $350k/unit. Whereas, a 50 year old version of the same structure, might sell for about $240k/unit. That’s a 32% difference. In contrast, the 50 year old units in the first sample sold for less than half the price of the newly built units. We can speculate about the reasons, but it likely has to do with price depression as a result of deferred maintenance pushing condominium fees higher in older condo units.
Ottawa Real Estate Prices Over Time
The following graph depicts the change in the average sale price of a residential property overtime.
| Year | Average Price | 1 Year Change | 10 Year Annualized Change |
| 1956 | $13,351 | 0.20% | |
| 1957 | $14,230 | 6.60% | |
| 1958 | $15,564 | 9.30% | |
| 1959 | $16,038 | 3.10% | |
| 1960 | $16,791 | 4.70% | |
| 1961 | $16,070 | -4.30% | |
| 1962 | $15,952 | -0.70% | |
| 1963 | $16,549 | 3.70% | |
| 1964 | $16,563 | 0.10% | |
| 1965 | $17,056 | 3.00% | 2% |
| 1966 | $18,004 | 5.60% | 2% |
| 1967 | $19,476 | 8.20% | 2% |
| 1968 | $23,329 | 19.80% | 4% |
| 1969 | $25,652 | 10.00% | 4% |
| 1970 | $26,532 | 3.40% | 5% |
| 1971 | $27,808 | 4.80% | 6% |
| 1972 | $30,576 | 10.00% | 6% |
| 1973 | $38,305 | 25.30% | 9% |
| 1974 | $46,661 | 21.80% | 11% |
| 1975 | $49,633 | 6.40% | 11% |
| 1976 | $54,623 | 10.10% | 11% |
| 1977 | $57,032 | 4.40% | 9% |
| 1978 | $59,134 | 3.70% | 9% |
| 1979 | $61,896 | 4.70% | 9% |
| 1980 | $62,748 | 1.40% | 8% |
| 1981 | $64,896 | 3.40% | 8% |
| 1982 | $71,080 | 9.50% | 6% |
| 1983 | $86,245 | 21.30% | 6% |
| 1984 | $102,084 | 18.40% | 7% |
| 1985 | $107,306 | 5.10% | 7% |
| 1986 | $111,643 | 4.00% | 7% |
| 1987 | $119,612 | 7.10% | 7% |
| 1988 | $128,434 | 7.40% | 8% |
| 1989 | $137,455 | 7.00% | 8% |
| 1990 | $141,438 | 2.90% | 8% |
| 1991 | $143,361 | 1.40% | 7% |
| 1992 | $143,868 | 0.40% | 5% |
| 1993 | $148,129 | 3.00% | 4% |
| 1994 | $147,543 | -0.40% | 3% |
| 1995 | $143,193 | -2.90% | 3% |
| 1996 | $140,534 | -1.90% | 2% |
| 1997 | $143,873 | 2.40% | 1% |
| 1998 | $143,953 | 0.10% | 0% |
| 1999 | $149,650 | 4.00% | 1% |
| 2000 | $159,511 | 6.60% | 1% |
| 2001 | $175,971 | 10.30% | 2% |
| 2002 | $200,711 | 14.10% | 3% |
| 2003 | $218,692 | 9.00% | 4% |
| 2004 | $235,678 | 7.80% | 5% |
| 2005 | $244,532 | 3.80% | 6% |
| 2006 | $255,889 | 4.70% | 6% |
| 2007 | $272,618 | 6.40% | 7% |
| 2008 | $290,366 | 6.60% | 7% |
| 2009 | $303,888 | 4.90% | 7% |
| 2010 | $327,225 | 7.70% | 6% |
| 2011 | $343,284 | 4.90% | 6% |
| 2012 | $351,792 | 2.30% | 5% |
| 2013 | $357,348 | 1.60% | 4% |
| 2014 | $361,707 | 1.20% | 4% |
| 2015 | $367,632 | 1.70% | 4% |
| 2016 | $371,901 | 1.20% | 3% |
| 2017 | $392,474 | 5.40% | 3% |
| 2018 | $407,571 | 3.90% | 3% |
| 2019 | $465,221 | 14% | 4% |
| 2020 | $529,675 | 19.90% | 4% |
| 2021 | $660,000 | 24.60% | 6% |
| 2022 | $642,000 | -2.7% | 6% |
Source: OREB, johncastle.ca
For a number of reasons, one should take care not to conflate the change in the average selling price of a property with appreciation. Most notably, the composition of the market changes overtime. For example, single family homes sold in 1956 were generally smaller than those sold today. As a result, the typical home built today might be more inherently valuable (so to speak) than the typical home sold in the 1950s. However, many of those homes that sold in the 1950s occupy what are now more centrally located than most of the market, and thus command a premium that they may not have commanded almost 70 years ago when many would have been near the city’s outskirts.
To root out these confounding factors, we can make use of CREA’s home price index. The home price index is a massive multi-dimensional statistical regression designed to root out the confounding effects I described in the previous paragraph. Below, you’ll find graphs of the home price index for Ottawa and several neighbourhoods that are especially important to real estate investors.
If you found this information helpful, check out more Ottawa real estate market statistics relevant to real estate investors or my complete guide to real estate investing in Ottawa.
