Equiton Snapshot: Ottawa Rental Market

Market overview

The Ottawa rental market, long valued by institutional investors for its stability and reliable growth, continues to stand out for its solid fundamentals and long-term resilience.

In recent quarters, multifamily rents softened in several primary markets across Canada, mainly in Toronto and Vancouver where rents had reached historic highs. This was driven by a record number of condominium apartment completions, resulting in a steep correction in rents within the condominium shadow market and a moderate decline among purpose-built rentals. Nationally, this erased condo rent gains made since March 2020, while purpose-built rentals exhibited strong fundamentals and remained significantly more resilient. Overall, however, the average Canadian rent fell to an 18-month low in May 2025.

Ontario’s second-largest rental market was — and remains — one of the few exceptions. Rental rates in Ottawa were stable despite a record number of apartment completions in the capital. Moving into 2025, Ottawa rents continue to rise. Population growth, government employment opportunities, urbanization trends, and unmet housing demand play key roles in supporting these trends.

Ottawa’s rental market at a glance:

• Of Canada’s six largest cities, only Ottawa saw annual rent growth across all unit types in May 2025, continuing its track record of rental strength.
• Specifically, CMHC’s June 2025 report said the average annual rent growth in the Ottawa-Gatineau region was 6.0% from 2019 to 2024. In contrast, Toronto’s was 4.8% for the same period.
• Purpose-built rents in new buildings increased 4.4% Y/Y at end of 2024.
• Colliers: Canada Cap Rate Report Q1 2025 shows cap rates for Ottawa high-rise developments from 4.25% to 5.25% and for mid-rise from 4.25% to 5.5%. Multifamily real estate remains attractive to investors due to long-term demand fundamentals and ongoing barriers to new development.
• CMHC’s Fall 2024 Rental Report found that the average rent increase was much higher for apartments that turned over to new tenants (23.8%) than for those where a lease was renewed (2.2%).
• At year-end 2024, occupancy fell to a post-pandemic low of 97.4%, well above the national average of 96.8% at the time.
• Nearly 3.7k purpose-built rental units were completed in 2024, but rents remained stable. New construction, on the other hand, fell to an 11-quarter low.

Ottawa Rental Market Fundamentals

Population growth

Ottawa’s population is just over 1.1M, making it the fourth-largest city in Canada after Toronto, Vancouver, and Montreal. The City of Ottawa projects its population will grow to 1.2M by 2030, with a long-term outlook of more than 1.4M residents by 2045. The current population for the broader region of Ottawa-Gatineau in 2025 is approximately 1.5M, representing a 1% increase from 2024. Despite being outpaced by the tremendous demographic growth in the GTA in recent years, Ottawa’s population growth contributes to its strong fundamentals.

Healthy rent growth since 2020 coincides with a post-pandemic acceleration in population growth driven by immigration and migration. As urbanization continues nationwide, Ottawa’s multifamily rental market benefits from a steadily climbing renter base.

Demand for urban living

For many, Ottawa provides a very good quality of life at a cheaper price than bigger cities like Toronto. It costs less to live in Ottawa, and residents have access to rich and varied urban amenities without having to live in a big city.

The municipality’s commitment to housing intensification, economic development, and planned public space enhancements has helped Ottawa continue to reap the benefits of demographic shifts, particularly downtown which has grown by 7.1% between 2016 to 2021. Year-round festivals, access to cultural centres, a vibrant downtown, as well as ample green space and bike trails have supported a trend toward rentership. Public transit options include the OC Transpo network of buses, trains, and light rail including the O-Train, a system spanning three lines and 25 stations.

Employment and income

The public sector remains a key employer in the city, providing a source of stable and well-paying jobs that help underpin rental demand and provide a steady foundation for the local real estate market while delivering multiplier effects to the area. Health care and education represent growing sectors, and the Kanata region has expanded into a tech hub. Although Ottawa is not immune from the economic volatility of recent times, the city enjoys an historically stable economy and represents the fifth-largest city economy by GDP in Canada.

According to the latest available data, Ottawa’s before-tax average household income ($125.6k) and median household income ($102k) both outpaced the national average and median incomes of $106.3k and $84k, respectively.

Home affordability

That said, even with higher-than-median incomes, home affordability remains as much a challenge in Ottawa as elsewhere in Canada. With Ottawa-Gatineau home prices projected to rise to $914,949 by the fourth quarter of 2035 — an almost 52% increase from Q3 2024 — Ottawans are remaining renters longer than previous generations as they save for a down payment or opting out of transitioning to private ownership altogether. Despite modest improvements in borrowing conditions and median incomes, more renters signalled plans to stay in the rental market last quarter. The BoC’s Q1’25 consumer survey found the share of Canadian renters who expect to transition to homeownership this year fell sharply to 16.1% by 9.9 points compared to the previous quarter.

Lagging housing supply

In 2024, CMHC reports that all types of housing construction in Ottawa fell. Construction started on 7,894 new homes and condominiums last year, down from 9,245 homes in 2023. Construction began on 1,515 new single-detached homes across Ottawa last year, down from 1,535 homes in 2023. Finally, construction starts for multi-unit buildings, condos, and apartments were down by 1,300 starts, with 6,379 new condos and apartments starts, which was a decline from 7,710 Y/Y.

Rental Market Outlook: Ottawa’s long-term stable rent growth continues

Uncertainty surrounding trade tensions continue to weigh on Canada’s economy and homebuyer decisions. However, the CHMC expects home prices will grow in 2025, with the housing markets in Ontario and British Columbia remaining particularly unaffordable. With these factors in mind, Ottawa’s rental market is expected to maintain its stable trajectory.

• The federal government has committed to expanding its roles in public housing, defence, and international trade, which are expected to support growth in public sector employment in Ottawa as well as in related industries such as Non-Governmental Organizations (NGOs), consulting, and legal services. This is expected to continue driving strong market rents and rent increases on natural turnover.
• The return to in-office work will continue to see some households move closer to Ottawa, generating higher demand for flexible and well-appointed rental units.
• Improvements to the city such as the $129M Byward Market renovation, redevelopment of the Ottawa River shoreline, and $800M in municipal infrastructure spending signal consistent efforts to improve urban amenities, supporting further demand for homes in the downtown core.
• Ottawa’s construction pipeline has more than 5,000 multi-family units under construction and an additional 30,000 units in the planning pipeline. This has and will continue to impact rental growth in the near term. However, like elsewhere in Canada, slowing construction coupled with numerous obstacles to timely delivery will result in more unmet demand in the region.
• Housing prices are expected to rebound as pent-up demand meets lower mortgage rates and easing trade tensions. This will compound pre-existing affordability issues, adding more demand pressures to the rental market.
• While rental markets are expected to ease as higher vacancy rates slow rent growth, Ottawa’s unique fundamentals are expected to continue to support a sustainable and reliable rental market. The local market’s continued strength makes it a cornerstone of a well-diversified portfolio.