Renting Vs. Buying a Home in in 2024: Everything You Need to Know About the Ottawa Housing Market

Housing affordability in Ottawa has been, and will continue to be, a hot topic this year. Ottawa, much like other major cities in Ontario and Canada, has a lack of affordable housing that’s become a real issue for our community. Residents have been left in quite the predicament, either work toward buying a home in a market that’s been quite unpredictable or rent at rates that soar way above the measure of affordability.

For many this is a losing situation and we are clearly nowhere near fixing our housing affordability issue. To put things into perspective, each year Canada has fewer housing completions than it did in the early 1970s when we had about half the population.

Here’s what we know about Rental Affordability in Ottawa Right Now.

In November 2023, the Office of the Federal Housing Advocate released a report on Canada’s housing supply shortage which estimated that “affordability” for low-income households is rent under $1050 per month and for moderate & medium income households that number is $2520 per month.

Applying this to Ottawa we can see that we have a huge lack of affordable housing. In November 2023, the median rent for a Studio apartment was $1475, up 7% from 2022. If we look even further at the data, we see that only 21% of studio apartments in Ottawa are between $699-$1389. 21% may seem reasonable until you break it down even further. Looking at (a popular rental listing website), only 58 studio apartments were listed in November, if only 21% were within the above price range, that’s only 12 units. This means we’re leaving low-income households out of the housing market almost completely.

In fact, a study done at Carleton University led by Steve Pomeroy highlights that for every new unit of affordable housing built in Ottawa, 31 are being lost due to rising rents, renovation or demolition. Indicating there’s a hole in our system that can’t be managed by new housing starts.

A Chart of Average Rent in Ottawa

Number of BedroomsMedian Monthly Rent# of Available Units
*as of November 2023

Here’s What We Know about Buying a Home in Ottawa Right Now.

The Royal LePage Market Survey Forecast says the aggregate price of a home in Ottawa will increase to $771,942 in the fourth quarter of this year from $738,700 in the fourth quarter of 2023.

Our market is heavily influenced by interest rates, so if we see even a slight decrease in the Bank of Canada prime lending rate, buyers will flock back to the market and prices will increase again. Although right now, as interest rates remain high, the only people buying and selling are those who absolutely have to due to personal reasons, commonly divorce, relocation, downsizing or an inability to afford their current property.

It’s predicted that prices for a single-family detached home in Ottawa will increase 4 per cent this year to $884,000 from $850,000 this year. The estimated cost of a condominium in Ottawa is expected to increase five per cent to $407,190.

Royal LePage CEO, Phil Soper is calling this year “The Great Adjustment”. Royal LePage is predicting that we’re going to see some changes this Spring that will lead consumers back to the market. Home prices will likely ease through the Spring and in the Summer or Fall we’ll likely see a cut to the prime lending rate. Regardless of the size of the cut, consumers will get a wave of confidence from this and participate in the market which will bring prices back up.

What does this Housing Market Outlook Mean?

Well, this information will mean different things to different people. For those who have the means to buy, it means that Spring 2024 might be your time. Prices will slow down before the Bank of Canada cuts the prime lending rate and that could be your window of opportunity before everyone who’s been sitting on the sidelines like you comes back into the market and causes housing prices to spike again.

If you don’t have the means to buy this year and renting is your only option there are a few key things to keep in mind when you’re looking for a place to call home:

  1. Work with a realtor. Many people forget that a realtor can help you on your quest to rent. Having access to someone who can find you an appropriate home within your price range is going to help relieve some of the stress of searching.
  2. Look at neighbourhoods with an average rental price that is within your budget. Some of the most affordable neighbourhoods include: Sandy Hill, Vanier, The Glebe, and Centretown.
  3. Also take a look at housing types. There can be a vast price difference between a condo, apartment, detached home, etc. Renting a room could be a suitable option for you if you’re looking to save on rent. Basement units or multi-unit homes can provide more space for a more affordable price.

If you have questions about what’s possible for you this year when it comes to real estate, reach out to us. We can connect you with mortgage professionals and provide resources for you to set yourself up for success this year.