Lies, Darn Lies and Statistics

February 4th, 2013

Well the world didn’t end in December and if it did, I was a tad overworked to notice.

In late November, CMHC released their semi-annual reports on the state of the rental markets in Canada.

I’ve been trying to get to them to build some kind of synopsis for the last two months, but time with family/friends, the holidays, the weather, just didn’t seem to cooperate.

I also made the mistake of starting with the raw statistics tables from CMHC. Go here if you really have nothing better to do OR you are a statistics hound and can’t get enough numbers in your diet. I promise not to start with this document next year. It does show the underlying numbers for all the other summaries of provincial or city reports.

I decided to go to the other end of the spectrum (macro to micro) and look at the Ottawa-Gatineau report.

The first thing I notice (besides the lovely colourful front page) is that although it is called Ottawa-Gatineau…. it really only covers the Ontario portion of said in great detail. Guess I’ll have to go digging at some point to find the summary for Ottawa-Gatineau (Quebec portion). The numbers are all in the first document and I noticed they list cities mostly alphabetically, except they were kind enough to “co-locate” Ottawa and Gatineau. Presumably for ease of direct comparison, or CMHC has a really weird alphabet system. Government agency, you never know.

So what’s the good news for Ottawa(Gat) or greater Ottawa or what CMHC likes to dub CMA Ottawa (Census Metropolitan Area)? Well for you local investors out there several good things.

Vacancy rate: year over year is up, however still below that magic mark of 3%, which is considered a “healthy” rental market. 2.5% indicates we’re pretty close to a healthy market in Ottawa.

What has cause the rate to rise? Weaker job prospects in the 18-24 age category. Translation, kids are staying home longer… where it’s cheaper. I’ll have 2 in this category soon. They see the “wisdom” of staying at home while attending one of the top engineering universities in Canada (no pride there at all for my alma mattre). And yes, still hoping they have an exit plan out of the basement when they graduate.

The other push to raise the vacancy rate has been the low lending environment we’ve been experiencing for the last couple of years has given first time home buyers the confidence to “make the jump” from renting to owning.

And lets not forget that Ottawa is one of the preferred immigration spots. This source of renters has also seen a decline, but still a healthy projection of 10K people moving to Ottawa.

That’s the demand side. On the supply side, it seems that folks discovered that renting out parts of their homes as “secondary” dwellings is a fantastic way to provide (likely) needed cashflow and added a whopping 4000 units (or 11% increase) to the overal market.

Condos, condos, condos… here’s one for the record books. Of all the condo’s in Ottawa one fifth (1/5) are rentals. The demand for them is clearly there as the rents for 2 bed condos also were a significante 15% higher than other 2 bedrooms.

That’s the summary for Ottawa-Gatineau (or maybe that’s minus Gatineau not a hyphen?). Read it yourself here.

I’ll try and provide a summary for Ontario next. To give a slightly bigger picture. Or maybe I’ll search for the Quebec portion of Ottawa-Gatineau.

 

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