By Kelly Bullock
For the last few weeks, Kate Defaye, a first-year Carleton University student, has been pouring over housing advertisements hoping to find a room for next year. Compared to a few years ago, Defaye is finding there’s plenty of choice in Ottawa.
“There’s a lot of spaces,” says Defaye who had five appointments with landlords lined up last week. “It’s easier than I thought it would be.”
With the next rental season coming up, landlords are finding it harder to fill vacancies and are pushing incentives at potential clients.
“There are some landlords that say if you’re willing to rent for the entire year you’ll get a month’s rent free and some will furnish the house,” says Defaye.
According to Christian Douchant, a senior marketing analyst for the Ottawa branch of the Canadian Mortgage and Housing Corporation, Ottawa’s vacancy rate is the highest it’s been in six years.
CMHC’s annual Rental Market Survey for 2003 found that Ottawa’s vacancy rate for privately-owned housing with three or more units was 2.9 per cent, a one per cent rise from 2002.
“Basically it’s sort of gone back to where it was back in 1994,” says Douchant. “We’ve really gone through quite a cycle.”
Douchant says rates rose to as high as 4.9 per cent in 1996 before dropping to a low of 0.2 per cent in 2000. Rates took a dive in the late 1990s when the high- tech boom brought more residents to Ottawa.
With Ottawa’s rate where it’s at, Douchant says tenants can expect to have more choice when it comes to where they want to live and how much they want to pay.
“It’s definitely more of a tenant’s market right now,” says Douchant. “Building managers are even offering incentives.”
Bob Wright, site administrator of Kent Towers, says the soft renting market has forced him to make a few changes.
“We’re doing just about what everyone else is doing in the marketplace,” says Wright. “There are a few incentives being offered like a month’s free rent.” But despite the offer, Wright says turnovers between tenants are slow.
“We get a fair bit of rental traffic here but it’s nice to see people have an opportunity to shop around a bit rather than feeling desperate-like they have to grab what they can get as was the case two years ago,” says Wright.
George Dawson, a landlord with Tri-core Top Property Management, says there are a lot of vacancies now.
“The last couple of years have been very tight from a landlord’s point of view,” says Dawson who is currently trying to fill two triplexes and a townhouse.
Dawson says he’s placed ads in the newspapers and put up signs advertising a month of free rent, but he’s still finding it difficult to attract tenants.
“The response hasn’t been as good as it was last year,” he says
Though landlords are finding it hard to fill spots, Douchant says they shouldn’t panic.
“With 2.9 per cent vacancy, it’s definitely higher than it used to be. But for a landlord, it doesn’t point to a bad situation like back in 1996 when it was almost five per cent,” says Douchant. “They may have to offer some incentives but I don’t think it’s a crisis situation yet for landlords.”
Douchant says the higher vacancy rate is because mortgage rates are so low and people are borrowing money to buy their own homes. New residential construction went up from 99,459 in 2000 to 140,206 in 2002.
Though mortgage rates are low and new housing starts are flourishing, Douchant predicts mortgage rates will rise over the next few years and more people will look to renting.
At the same time, Douchant points to young adults entering the market as potential tenants.
“We have a growing 15 to 24 year-old age group based upon our last census,” says Douchant. “When that group enters into the rental market that will have a positive impact.”
Until vacancy rates drop, potential tenants like Defaye can expect to see more incentives thrown at them like discounts, furnishings and free parking.