Like most major Canadian metros, the vacancy rate in Ottawa has been chronically low. While the city saw some relief during covid when vacancy rose to 3.5% in 2021 from 1.8% in 2019. I expect that the 2022 data will reveal that most of that change has reversed.
In this article, we’ll examine vacancy rate data for Ottawa’s investment real estate market. We’ll compare the vacancy rate here to other major markets; look at how the rate has changed overtime; and examine how the rate varies, within Ottawa, by neighbourhood, apartment size, and price.
Vacancy Rates in Ottawa vs Other Cities
Ottawa’s vacancy rate is third lowest of Canada’s six major metros (population > 1,000,000). The official numbers for 2022 are pending, I suspect that the vacancy rate had reached 2% by Q4 2022 and is now below that. For context, a vacancy rate between 3-5% is considered balanced; rates above, and below, that range are, respectively, tenants’ markets, and landlords’, markets . Data is usually released in the first half of the subsequent year (e.g. 2022 vacancy rates will be released before the end of June 2023). Accordingly, at this time (Q1 2023), the 2022 and 2023 vacancy rates are predictions.
TABLE
| 2021 | 2022 (predicted) | 2023 (predicted) | |
| Vancouver: | 1.20% | 0.80% | 0.70% |
| Montreal: | 3.00% | 2.00% | 1.80% |
| Ottawa: | 3.50% | 2.00% | 1.70% |
| Toronto: | 4.50% | 2.50% | 2.30% |
| Calgary: | 4.90% | 4.50% | 4.30% |
| Edmonton: | 6.90% | 6.50% | 6.30% |
| Canada | 3.10% | 2.20% | 2.00% |
| USA: | 6.10% | 6.00% | -- |
American data: US government census
Canadian data: CMHC
Vacancy Rates in Ottawa Overtime
Vacancy rates in Ottawa had historically floated around 3.5%. However, the rate began to decline sharply in 2016 before reaching its nadir in 2018. A brief exodus of international students during the pandemic saw some units return to the market. However, from my observations, that slack appears to have been resorbed.
- 2015: 3.5%
- 2016: 3.1%
- 2017: 1.7%
- 2018: 1.6%
- 2019: 1.8%
- 2020: 3.8%
- 2021: 3.5%
- 2022: 2.0% (predicted)
- 2023: 1.7% (predicted)
Mid 2022, the housing economist Mike Moffat, released an important paper [1] that reached several important conclusions. One of those was that Ontario’s Ministry of Finance had severely, and chronically, underestimated population growth in the province. City planners wrote their official plans with the Ministry of Finance population projections in mind. As a result, too few homes were built. The effect of that underbuilding was most acutely seen in the GTA, where population growth, through immigration, had been strongest. By 2017, that growth had spilled into Ottawa, and vacancy rates sank. In 2020 and 2021, international students returned home to take advantage of lower living costs and the distance learning opportunities offered to them by Ottawa’s universities during the pandemic. Consequently, vacancy rates increased sharply. The return of students in 2022 and rising interest rates (and the associated rising cost of ownership) have driven vacancy rates lower. While we may not have official numbers for 2022 until later in 2023, it seems to me that vacancy rates have likely returned to their pre-pandemic levels.
Vacancy Rates in Ottawa by Bedroom
In Ottawa, bachelor apartments see the fewest vacancies, whereas the vacancy rate in 3 bedroom apartments is higher.
By room size, vacancy rates in purpose built apartment buildings deviate from the average thus:
- X axis: 3.5%
- Bachelor: 3.1%
- 1 Bedroom: 3.5%
- 2 Bedroom: 3.3%
- 3 Bedroom: 4.3%
Most of Ottawa’s 3 bedroom units were built during the apartment construction boom of the 1970s, when more renting families preferred apartments over row houses. Since then, the preferences of renting families have shifted toward row houses. As a consequence of both, the change in preference, and the glut of 3 bedroom apartments built during the construction boom, the 3 bedroom apartment vacancy rate is notably elevated. The 3-bedroom vacancy rate remains low despite being the highest of the various apartment sizes. In my view, the elevated rate isn't, by itself, enough reason for an investor to eliminate 3 bedroom apartments from consideration.
Neighbourhood Vacancy Rate Data for Ottawa
In this section we examine the vacancy rate data among investment properties in Ottawa and break that data down by neighbourhood
The rates here are the same used by the CMHC multi-family (5+ unit) investment property underwriting division. If you’re considering a CMHC insured loan on your 5+ unit multi-family investment property, use the vacancy rates here to calculate your debt coverage ratio.
Inner West
| Pinecrest | 1.4 |
| Bayshore | 4.6 |
| Britannia | 1.8 |
| Carlington | 3.5 |
| Westboro | 0.3 |
| Tunneys | 4.2 |
Data: CMHC
| Core | |
| Chinatown | 5.1 |
| Centretown | 1 |
| Downtown | 3.1 |
| Lowertown | 9.3 |
| Sandy Hill | 3.7 |
Data: CMHC
| Inner South | |
| Old Ottawa South | 0.8 |
| South Keys | 1 |
| Alta Vista | 8.4 |
| Glebe | 0.4 |
Data: CMHC
| Inner East | |
| Vanier | 4 |
| Overbrook | 2.1 |
| New Edinburgh | 2.6 |
| Cyrville | 1 |
| Gloucester | 2.2 |
Data: CMHC
| Exurbs | |
| Barrhaven | 0.4 |
| Kanata | 3 |
| Orleans | 1.1 |
Data: CMHC
Vacancy Variations by Apartment Size
In the following graphs, we see how vacancy rates for various sized apartments deviate from the overall vacancy rate for a neighbourhood. For example, in Barrhaven, we see that the vacancy rates for one bedroom and two bedroom apartments are 0.4% less than the vacancy rate for Barrhaven overall, while the vacancy rate for three bedroom apartments is 1.7% higher. Note that a minority of the figures in these graphs were estimated by extrapolating data from previous years.
In contrast to the previous section, CMHC multi-family (5+ unit) investment property division generally does not use bachelor specific neighbourhood vacancy rates. Accordingly, the figures here are most appropriate to use in your own projections.
Exurbs
| Neighbourhood | One Bedroom | Two Bedroom | Three Bedroom |
| Barrhaven | -0.4 | -0.4 | +1.7 |
| Kanata | +0.2 | -0.8 | -0.2 |
| Orleans | +0.5 | +0.2 | -0.6 |
Caption: Size related vacancy deviations among Ottawa’s neighbourhoods outside the greenbelt.
Data: CMHC
Inner South
| Neighbourhood | One Bedroom | Two Bedroom | Three Bedroom |
| Glebe | -0.1 | 0.6 | -0.5 |
| Old Ottawa South | 1.1 | -0.2 | -0.8 |
| South Keys | -0.2 | 0.1 | 1.1 |
| Alta Vista | -2.4 | 0.6 | -1.8 |
Data: CMHC
Core
| Neighhbourhood | One Bedroom | Two Bedroom | Three Bedroom |
| Chinatown | -1 | 0.2 | -5.1 |
| Downtown | 0 | -0.9 | 0 |
| Lowertown | -1 | 3.1 | -8.1 |
| Centretown | 0.1 | 0.2 | -1 |
| Sandy Hill | -0.3 | -1.1 | 5.8 |
Data: CMHC
Inner East
| Neighbourhood | One Bedroom | Two Bedroom | Three Bedroom |
| Vanier | -0.8 | 0.5 | -3.7 |
| Overbrook | 0.3 | 0.4 | -1.2 |
| New Edinburgh | 2.9 | -0.8 | -2.6 |
| Cyrville | -0.2 | 0 | -0.1 |
| Gloucester | -0.7 | 0.5 | -1.6 |
Inner West
| Neighbourhood | One Bedroom | Two Bedroom | Three Bedroom |
| Bayshore | 0.3 | -1.3 | 0 |
| Britannia | 0 | -0.3 | -0.9 |
| Carlington | -2.4 | -2.9 | -2.4 |
| Pinecrest | -1.1 | -1.2 | -0.7 |
| Knoxdale | -0.4 | 0.8 | -0.3 |
| Westboro | 0.2 | -0.1 | 0 |
| Tunney's Pasture | 0 | 0 | 0 |
Source: CMHC
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.
