By Amanda Pratt
As the vacancy rate climbs in Ottawa, some Centretown landlords are offering vacations, free rent and other incentives to potential tenants in a desperate effort to rent out their apartments.
“It definitely is a tenant’s market right now,” says Christian Dou- chant, a senior market analyst with the Canada Mortgage and Housing Corporation (CMHC).
“Landlords are now being very competitive and they’re trying as hard as possible to attract tenants,” he says.
According to the CMHC, the vacancy rate in Ottawa is expected to surpass last year’s rate of 2.9 per cent. Specifically for the downtown area, including Centretown, the 2003 vacancy rate was 3.3 per cent, up from 1.4 per cent in 2002.
Just four years ago, Ottawa’s vacancy rate was only 0.2 per cent and landlords could choose from long lists of prospective tenants, many of whom found themselves out of luck.
Roommates Matt Hrycyna and Danylo Spolsky, both second-year students at Carleton University, signed a lease at the beginning of the school year. They say they found it much easier to find a nicer place this year.
Hrycyna says the landlord at the first apartment they looked at quickly offered a lower rent. “The landlord dropped it $150 almost right away, without anything.”
While most of their friends signed leases at the end of the school year last April, Hrycyna says he and Spolsky wanted to wait until September to find a place.
“I think we did better doing this because landlords are getting desperate,” he says.
Douchant says the combination of people renting out condos, new construction and people leaving the rental market because of attractive low mortgage rates is creating a supply of apartment units throughout the city.
With extra rooms available, landlords have not been able to raise rents like in the past.
“What we’re definitely seeing is rents are not moving, they’re not budging,” says Douchant, adding that in some areas rents have declined slightly.
Karen Rowan, an administrator for Fleming Property Management (FPM), agrees rents have lowered. She estimates that rents have come down $25 to $100 a month for high-end range apartments, such as the approximately 150 units FPM rents out in the Centretown area.
“We have to watch our pricing very carefully now, whereas before you could pretty much charge whatever you wanted and if you had a good place, it would go,” she says.
But while other landlords are trying to attract tenants with chances to win trips to sunny destinations and other unusual offers, Rowan says this is not the case at FPM.
“We get calls, people asking if we’re offering free months rent or anything like that and we’re not needing to right now because the fact is if it’s a good apartment and it’s priced right and serviced right, there’s no problems with rentals here,” she says.
Still, Rowan recognizes there are many units available because people have been calling her saying they’ve “seen tons.”
“We’re finding that it is down from last year in terms of demand but it’s not a problem,” she says. “We have to work a little harder, but we’re getting the same results.”