Real Estate and Construction

Ottawa had consistent year-to-year increases in housing starts over the eight year period between 1995 and 2002.  There was an overall decline in construction of single detached homes between 2002 and 2016, and while a modest increase in starts for single dwellings has been observed since 2012, rates are still not as high as the 2002 levels. Across all types of housing starts there was a 7% increase from 2015 to 2016, due to the increase in row housing.

Ottawa saw a dramatic decline in commercial vacancy rates in response to the rapid development of the tech sector in the mid to late 1990s. This was followed by an almost equally dramatic rise following the crash in this sector in 2001. The several years it took for vacancy rates to peak reflects the fact that some buildings were in development but not yet on the market when the bubble burst. It also reflects the multi-year nature of commercial leases, leading to delays before vacant space appears on the market.

The steady growth in inventory from 2003 to 2016 added over 900,000 sq m of office space, an increase of 32%. New construction and renovation in response to federal requirements for improved work space has led to higher vacancy rates in older, unrenovated space.

Of Canada’s six largest cities, at under $20 per square foot in 2016, Ottawa had the second lowest average rental rate for high quality ("Class A") office space.

Ottawa's 2016 vacancy rate for total office and industrial space was the third lowest of the six cities. It had one of the lowest increases in average annual vacancy rates since 2012, second only to Toronto.