Ottawa`s Real Estate Market


Ottawa’s real estate market among Canada’s most stable, Colliers says

OBJ Staff

Ottawa’s real estate market continues to be one of the most stable in Canada, according to a new report on investment real estate released by Colliers International.

Place Bell at 160 Elgin St.

Capitalization rates – the ratio of operating income from a property to its value – remained largely unchanged in almost every sector, according to the report.

Downtown office vacancies have increased over the past 18 months, the report says, pushing rents down.

"Presently, downtown office vacancy sits at 10.8 per cent, with average net asking rents at $20.20," the report says. "This is primarily a result of the previous government’s fiscal policies, which led the federal government to use notably less office space."

However, Colliers expects that with the recent change in government, the vacancy rate will start to come down and rental rates will rise.

It expects the market to become more competitive for landlords. Both the federal government and private businesses are seeking out buildings with things such as LEED certification and attractive locations.

That means property owners will have to make investments or compete on price.

In the retail sector, "large-format, big-box retail developments are struggling with large pockets of vacant space," the report says. "On the other hand, Ottawa’s large-scale regional malls have very little vacancy and continue to attract new, high-end retailers."

In the industrial sector, short supply is driving rents up – making Ottawa one of the best markets for industrial landlords in the country, despite being one of the smallest markets among Canada’s major cities.

Colliers says the average industrial asking rental rate in Ottawa is $9.96 per square foot, compared with $5.37 in Toronto.

However, there are fears that those high prices are pushing tenants to look to the Toronto or Montreal markets for more competitive rents.

In the residential market, purpose-built rental buildings are being constructed for the first time in about 20 years, the report says, as condominium development slows.

"The condominium market in Ottawa has stalled with an estimated three-plus years’ supply of complete and under-construction condominium units. As a result, sale prices for condominiums in Ottawa have trended downward over the past two years," the report says.

Colliers says it expects this trend to continue.

Sue Willmott

Sue Willmott

Sales Representative
CENTURY 21 Explorer Realty Inc., Brokerage*
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