According to the Canada Housing and Mortgage Corporation (CMHC) vacancies rates continued to rise in the Ottawa area in Autumn of 2013.
This information showing more vacant rental units follows a trend as reported by CBC news in June.
In that report landlords from across the Ottawa region explained the frustrations they feel when there aren’t tenants and their rental units remain empty.
What’s the Vacancy Rate in Ottawa?
According to the CMHC survey the Ottawa vacancy rate was 2.9% in October 2013.
This is slightly up from 2012 when the vacancy rate was at 2.5%.
While it seems like a small increase it shows a trend.
Furthermore, the Ottawa rate is higher than the Ontario average and less than other cities such as Toronto where landlords are not reporting any issues finding tenants.
Why Are There More Empty Rentals in Ottawa?
The economics of supply & demand are playing a key role.
On the positive side for landlords, newcomers to Canada continue to come to the Ottawa region and rent.
On the negative side of things the job market has been weakening.
This leads a variety of factors leading to higher vacancies such as:
1. With fewer jobs available less people come to Ottawa and rent
2. A weak job market creates fear leading some renters to move back to their parents house
3. Higher unemployment means some renters leave the city
4. Tenants decided to downsize. Instead of renting two properties, they decided to move in together
5. Lay-offs lead to some tenants being evicted
Are There Any Other Factors Leading To Empty Rental Units in Ottawa?
CONDOS FOR RENT
2013 saw a large increase in the number of condos for rent.
There were 1,254 more condominiums for rent. This is an increase of 23%.
More condos in the market led to more choices for renters and more empty rental units as landlord competed for good tenants.
The vacancy rate for Ottawa condos rose from 3.2% in 2012 to 3.6% this year.
TOWNHOUSES FOR RENT
In addition to a whole new batch of condos on the market, there were a large number of new townhouses.
The survey showed the average number of people who wanted to rent together was three.
This led to more families choosing to rent townhouses over smaller condo units. This actually led to a decline in the vacancy rate for townhouse rentals.
CMCH Reports Landlords Are Raising Rents Lower Than The Ontario Rent Increase Guideline
With more competition and increasing struggles to find good tenants Ottawa landlords were cautious in attempting to get current tenants to stay renting from them.
This is show by the small amount landlords increased rent to current tenants.
The Ontario government’s Rent Increase Guideline (AGI) was 2.5% in 2013.
However the average rent increase in Ottawa was only 2.0%.
This isa significant amount considering many residential landlords already felt the Rent Increase Guideline was too low and didn’t account for the true increase in costs for being a landlord.
What Can Ottawa Landlords Do To Find and Keep Good Tenants?
It is a frustrating challenge for landlords in Ottawa and many other cities and towns in Ontario.
While British Columbia landlords are finding good tenants within weeks and some landlords in Alberta have line-ups and don’t even need to do much advertising, landlords here need to come up with constructive and creative strategies for marketing to tenants and keep tenants.
What Are Some Ways To Keep Good Tenants?
There are different strategies and methods. Some Ontario landlords are even giving Christmas gifts to their tenants in order to create a strong bond and get them to continue to stay in their rental property.
In the following months we will discuss this important question and help every Ottawa landlord in the new year.