Ottawa condos are 0.6% vacant and still lose $419 a month

The best rent data I have seen, against the worst price data

In June I told you the default Ottawa condo loses money every month at 20% down. Since then CMHC's 2025 Rental Market Report has been sitting in my reading pile with a number that looks like it argues the other way. Ottawa's rental condominium apartments are 0.6% vacant. Purpose-built buildings are at 3.0%.

A 0.6% vacancy rate is what a landlord's dream looks like. So I reran the June condo post with the most favourable pairing of public numbers I can build, and checked whether it flips.

Two sources that never cite each other

CMHC's survey says the average two-bedroom rental condo in the Ottawa area rents for $2,503 a month. That is almost 30% above the $1,926 for a purpose-built two-bedroom (2,503 divided by 1,926 is 1.30). Condos are nearly 15% of the rental universe, and their supply grew 10% in the year, against 4.7% for conventional rentals.

OREB's September release prices what it calls the benchmark apartment. The report describes it as a two-bedroom of 952 square feet. The benchmark is $380,800, down 6.1% on the year and down 3.1% from August. Apartments had 7.3 months of inventory, 121 sales (down 24.8%), and 883 active listings.

Same unit type on both sides. One side is renting at 0.6% vacancy. The other has seven months of supply sitting unsold.

The arithmetic, line by line

Buy at $380,800 with 20% down. That is $76,160 down and a $304,640 loan.

Rent: $2,503 times 12 is $30,036 a year. That is a 7.9% gross yield, which is exactly why this looks so good on a napkin.

Now the costs, using the same assumptions as June. Condo fees at $0.70 a square foot on 952 feet is $666 a month, $7,997 a year. Property tax at about 1.1% of value is $4,189. Insurance is $540 and a maintenance reserve $600. Vacancy at the 5% I used in June is $1,502.

Net operating income is 30,036 minus 1,502, 7,997, 4,189, 540 and 600, which is $15,209. On $380,800 that is a 3.99% cap rate.

Debt service at 4.5% over 25 years, with Canadian semi-annual compounding, is a 6.64% constant. On the $304,640 loan that is $20,233 a year. NOI minus debt service is negative $5,025, or about $419 a month, a cash return of negative 6.6% on your $76,160.

The hurdle from my mortgage constant post is 6.64% times 0.8, which is 5.3%. This unit gets to 4.0%.

Give the landlord everything

Take the vacancy allowance down from 5% to CMHC's 0.6%. Vacancy cost falls to $180, NOI rises to $16,530, the cap rate is 4.34%, and the monthly bleed is about $309.

Drop condo fees to $0.55 a square foot, a newer building, with the 5% vacancy back in. NOI is $16,922, a 4.44% cap, and the bleed is $276.

Still negative. Rent would have to reach about $2,944 a month, 18% above CMHC's average, for this unit to carry itself at 5% vacancy. Or run it backward. At NOI of $15,209 a leveraged buyer at 4.5% can pay $286,000, which is 25% under the benchmark. Use the 0.6% vacancy and it is $311,000, 18% under.

Why this pairing flatters the condo

I need to be straight about what I did. I took a regional price benchmark and a rent figure from a different sample.

CMHC's rent comes from condos that are actually in the rental pool, and it is an October 2025 reading. Those tend to be newer and more central than the unit OREB uses to define a typical apartment. If a $2,503 condo costs more than $380,800 to buy, and I expect it does, the real cap rate is lower than my 4%. I could not get a unit count or building ages from the CMHC page, so I cannot tell you by how much.

So treat 4% as the ceiling on what two public sources can tell you, not a forecast of what you will earn.

What I got wrong in June, and what I did not

June's example was a 700 square foot one-bedroom at $385,000, which is $550 a foot, renting $1,900. This one is 952 feet at $400 a foot renting at $2.63 per foot. Rent per foot barely moved ($2.71 to $2.63). Price per foot did. The benchmark has fallen, and a two-bedroom at the benchmark pencils about 1.3 points better than that Centretown one-bed.

What I got wrong is the tone. I called the segment oversupplied and gave rents little credit. Rents are fine. A 0.6% vacancy rate means the tenants are there.

What I got right is the conclusion. High occupancy does not rescue a deal that costs 6.64 cents a year to finance and returns 4.

The gap between the two markets

Renters cannot find condos. Owners cannot sell them. I think the answer is that rents track what the tenant can pay today, while prices track what a leveraged buyer can pay, and that buyer is 18% to 25% below the seller. That is my reading, not something either report says. I also expect the 0.6% to rise, because condo rental supply grew 10% and the vacancy band post already showed new buildings filling slowly. CMHC's next report comes in December, and I will score myself against it.

What to do with it

If you are an owner of a rented condo, a 0.6% vacancy rate is real leverage in your next lease conversation. If you are buying one to rent, price is the only lever left. Get the status certificate, the fee history and the reserve fund study reviewed before you offer, and read the appraisal gap post, because a benchmark that fell 6.1% in a year can short your appraisal.

I sell houses. I do not give mortgage, tax or legal advice, so the financing side belongs with a mortgage broker and your accountant.

Send me a condo you are eyeing and I will run these lines on its actual rent, fees and tax bill. Call 613-262-6545 or email fil@613realtor.ca, and in the meantime see what is listed.