Ottawa turnover is 1.8x Toronto's. That used to be good news

Ottawa's tenant turnover rate is the number nobody here quotes, and it is the one that decides whether your rent roll grows or shrinks this year. CMHC published it in June. Nobody opened the table.

The table CMHC put near the bottom of the page

In the 2026 Mid-Year Rental Market Update, CMHC broke turnover down by rent quartile for seven major markets. Turnover means a unit that took a new tenant in the past twelve months. Ottawa's four quartiles, cheapest to most expensive, came in at 14.0%, 15.3%, 15.2% and 21.8%.

Average those and 16.6% of Ottawa's rental stock changes hands in a year.

Toronto's four numbers are 7.9%, 8.1%, 8.7% and 12.1%. Average 9.2%.

Ottawa turns over 1.80 times as fast as Toronto. Run it on the top rent quartile alone and you get the identical ratio, 21.8 against 12.1.

Compound that and an Ottawa landlord reprices 42% of a rent roll every three years. A Toronto landlord reprices 25%. Same province, same statute, wildly different exposure to whatever the market is doing.

For fifteen years that was the reason to own here

Section 113 of the Residential Tenancies Act is one sentence. "The lawful rent for the first rental period for a new tenant under a new tenancy agreement is the rent first charged to the tenant."

That is vacancy decontrol. A sitting tenant gets the guideline and nothing more, which is 2.1% in 2026, and the 2027 number lands at 1.9%. A departing tenant hands you a blank sheet.

So under Ontario rent control, turnover is not a cost. Turnover is the whole growth mechanism. Everything else is capped near 2%.

Ottawa turning over twice as fast as Toronto meant Ottawa landlords reached market rent twice as fast. While market rent climbed, that was the entire thesis.

Now read the statute again

Notice what section 113 does not say. It does not say the new rent has to be higher. It says the rent first charged is the lawful rent. The statute is symmetric. The market is the part with a direction.

Ottawa's direction changed. CMHC's asking rent index for a two-bedroom, set to 100 in Q1 2024, ran Ottawa up to 108.7 by Q1 2025 and back down to 104.4 by Q4 2025. Call it 4% off the peak.

Here is the part people read backwards. That 104.4 is still the highest of the seven markets CMHC tracks. Toronto sits at 93.7, Vancouver at 89.8, Calgary at 92.3. Ottawa has not fallen further than everyone else. Ottawa started falling a year later. That is not safety. That is being early in a move the other cities are most of the way through.

Six units, one turnover, one uncomfortable number

Take a small Ottawa landlord with six two-bedroom units at CMHC's city average of $1,926. Gross rent is $138,672 a year.

Serve the N1 on all six at the 2026 guideline and each goes to $1,966. That is $2,912 more over the year. Real money on a portfolio this size.

Now apply Ottawa's own turnover rate. At 16.6%, one of those six units turns over this year. Not might. That is the average.

Five units collect the guideline. One sits empty a month, costs $1,500 in paint, cleaning and listing time, and re-lets at whatever the market gives you.

For the portfolio to merely match last year's gross, that one unit has to re-let at $2,017. That is 4.7% above what it rents for today, in a market where asking rents are down 4%.

Let it re-let 4% below the in-place rent, which is roughly what the index implies, and the six-unit portfolio finishes the year at $136,825. You served a guideline increase on five units and still went backwards by $1,847.

One turnover cancelled the guideline on five. That is what a 16.6% turnover rate does when the market is moving the wrong way.

The concession trap, and this one is permanent

CMHC's operators reported that incentives have intensified over the past six months and now reach several months of free rent, plus free parking, gift cards, move-in credits and cash bonuses.

Two months free on a twelve-month lease at $2,000 is an effective rent of $1,667. The face rent is 20% above the real one.

Go back to section 113. The rent first charged is the lawful rent. The building offering two months free sets its base at $2,000 and takes the guideline off $2,000 every year afterward. If you match their effective rent honestly by posting $1,667 with no concession, your base is $1,667 forever.

In year one both tenants pay the same $20,000. Run both forward ten years at a 2% guideline. The face rent landlord collects $258,793. You collect $218,994. The gap is $39,799 on a single unit, and you handed it over to look straightforward on a listing.

If you have to buy the tenant, buy them with a concession, not with the rent.

It also means the published asking rent figures understate the softening. CMHC measures the advertised rent. The incentive sits underneath it, and nobody indexes that.

Which of your units is actually exposed

CMHC is specific about where the vacancy is. Highest in structures built after 2020 and in units near post-secondary institutions. Older stabilised buildings and family-sized units are still tight.

Cross that with the turnover table and it gets unpleasant for one kind of owner. The top rent quartile turns over at 21.8%. New buildings carry the highest vacancy. A newer unit near campus is both. Own a 2022 condo by a university and you are in the segment with the fastest repricing, the longest lease-up and the softest asking rents at once. That is the condo investing reality check turning up in a different data set, and it is the student rental question as well.

The boring end of the portfolio is where the money is. A tired three-bedroom in an older building with a tenant six years into the tenancy is not exciting. It is also not turning over.

The honest read

Ottawa's vacancy rate is 3.0%. CMHC's new analysis puts Ottawa's balanced band at 2.0% to 4.0%, which makes 3.0% the middle of it, and the middle of the band is where inflation-adjusted rent growth sits near zero. Anyone still using the old industry rule that 3% means balance and rents are about to move will be waiting a while.

Keep your good tenants. Price the ones you must re-let off the effective market rather than the advertised one, and when you cut, cut with something that does not follow you forever. Stop treating turnover as the upside. For fifteen years it was. This year it is the thing to plan around. The small landlord softening picture and the MLI Select rent cap are worth a read if you are financing.

If you own Ottawa rental property and want your own numbers run instead of the city average, call me at 613-262-6545 or email fil@613realtor.ca. Bring the rent roll and the lease dates. Twenty minutes on real figures beats another market report. You can also see what is listed right now.