Latest CMHC rental market report shows Ottawa’s vacancy rate fell to 2.1 per cent in 2022

A new report from the Canada Mortgage and Housing Corporation (CMHC) shows Ottawa's vacancy rate was 2.1 per cent in 2022 which is down from 3.4 per cent in 2021.

“Strong demographic and economic fundamental conditions supported rental demand,” the CMHC report said. “In addition, local students are also returning to the classroom. While vacancy rates fell in several sectors of the Ottawa area, the drop was most apparent in central neighbourhoods.”

In its report, the CMHC said the Sandy Hill and Lowertown areas, close to where the University of Ottawa is located, are among the areas where the vacancy rate decreased the most, falling from 5.3 per cent to 2.1 per cent. 

Vacancy rates stand at 1.3 per cent in the downtown core, and 0.7 per cent in the Glebe and Old Ottawa South areas, which are close to Carleton University.

The rate of 3.5 per cent in the Alta Vista community is higher than any other sectors in Ottawa, the CMHC said in its report. However, that number is down from the previous year's 7.9 per cent. 

“Alta Vista was among the sectors with the greatest number of completions in 2020 and 2021,” the report said. “The addition of these units could explain why the vacancy rate there remains higher than elsewhere.”

In Ottawa, the CMHC said over the past 12 months, the same-sample average rent for a two-bedroom apartment rose by 4.8 per cent. 

“The increase wasn't as strong in 2021 (1.3 per cent),” the CMH said. “It had likely been slowed by the rent freeze in Ontario and the high vacancy rate that year. With the growing scarcity of vacant units, rents are once again under pressure, as they were from 2018 to 2020. This situation may encourage owners to raise the rent when a tenant moves out of a unit.”

The CMHC noted the average rent for a two-bedroom apartment in 2022 was $1,520 for units that didn't turn over to a new tenant and $1,831 for units that did turn over to a new tenant.

“The turnover rate fell from 2021 to 2022,” the report said. “It declined from 22.8 per cent to 16.8 per cent, a lower rate than in 2020, at the peak of the pandemic (17.9 per cent). In 2021, the reluctance of tenants to move faded away. Over the past year, this hesitation to look for a new home was renewed by the significant drop in vacancy rates and the increase in rents for vacant units.”

According to the report, the condominium vacancy rate is stable, but remains low. 

“The vacancy rate for rental condominium apartments remained stable at only 0.5 per cent,” said the CMHC. “It has been below one per cent since 2019. The rate has remained low since the supply of rental condominiums stagnated. The supply has stagnated because condominium completions have slowed down and the proportion of condominiums offered as rentals has stopped increasing. This proportion has remained stable at about 30 per cent since 2016. Again, this year, it was 28.7 per cent. The average rent for rental condominiums remained higher than for purpose-built rental apartments ($2,075 versus $1,625 for two-bedroom units). Most new condominiums on the market were added starting in 2004 and are therefore recent. Rents tend to be higher in recently built units.”

Gatineau's vacancy rate is currently at 0.8 per cent. 

“Statistically speaking, it remained stable compared to the rate recorded in October 2021 (1.1 per cent),” said the CMHC. “Supply and demand both experienced strong growth, resulting in a stable vacancy rate.”

The average rent for a tw-bedroom apartments posted its greatest increase at 9.1 per cent since data has been available

Interprovincial migration also increased, thanks in part to an improved balance with Ontario,” the report said. “Indeed, the number of people leaving Ontario for Québec continued to grow, almost erasing Québec’s usual migration deficit with Ontario. Typically, a large share of these Ontario households (mainly from Ottawa) settle in the Gatineau area.”

The vacancy rate for Kingston was 1.2 per cent in October 2022 from 1.4 per cent in 2021.

“The vacancy rate stabilized because rental demand kept pace with supply growth in 2022,” the report said. 

The full report can be found here.