Apartment vacancy rate hits 16-year high

With demand dampened by the COVID -19 pandemic and a growth in supply, Ottawa's rental apartment vacancy rate rose to 3.9 per cent in October 2020 — a 16-year high, and more than double what it was in 2019.

In its annual rental market report, Canada Mortgage and Housing Corp. described a rise in the vacancy rate in core Ottawa neighbourhoods, and in areas popular with students and/or with lots of newly built units — Sandy Hill/Lowertown, Alta Vista, Chinatown/Hintonburg/Westboro.

“It was expected that the vacancy rate would go up,” said Anne-Marie Shaker, a senior CMHC analyst. And it did so not just in Ottawa but in most major centres across the country, she noted.

The factors she described in the report as likely drivers behind the increased apartment vacancy rate, locally, will be no surprise to anyone tracking the impacts of the COVID-19 pandemic — reduced immigration, fewer students renting, and remote work.

The ability to work online or the loss of jobs may have led some younger people to stay home or move back there, said Shaker, in an interview with the Citizen. Some could have decided to room with other people. And other renters might have elected to move into home ownership.

Estimates from the CMHC rental market survey indicate that while supply increased by 2,316 units, the number of newly occupied units was less than half that, at 887.

Drilling down into local vacancy, CMHC data show considerable variance between apartments at different price points. For those with rents of $1,350 or more, the vacancy rate was 6.2 per cent in October. This dropped to three per cent for units between $1,200 and $1,349, and further still to 2.3 per cent and 1.7 per cent for those with rents between $1,050 and $1,199 and $900 and $1,049, respectively.

The lower-rent apartments could be home to long-term tenants, Shaker said. (By law, Ontario landlords are restricted in their ability to raise rents on occupied units). Pricier rentals may have been vacated by those electing instead to purchase a home. And then there are the new units that come online, which Shaker said can take a while to fully lease up.

CMHC reported that the average rent paid for a two-bedroom rental apartment in Ottawa (this doesn't include condos) in October was $1,517. For a one-bedroom, this was $1,244, and for a bachelor, $1,000.

The average rent for a two-bedroom apartment in Ottawa was up by 5.2 per cent — lower than the previous year's eight-per-cent growth. And rents rose across units of all bedroom types.

Turnover rates stayed strong in 2020.