Ottawa’s commercial real estate professionals and other industry watchers are among the most confident in their local market compared with their peers from across the country, according to a new survey.
In its Emerging Trends in Real Estate 2019 survey, professional services firm PwC found that Ottawa respondents were among the most bullish in ranking their city in terms of economic strength, investor demand, access to capital, development opportunities, public and private investments as well as community development.
Of 10 major markets surveyed, Ottawa ranked third, behind Vancouver and Toronto.
“As its economy diversifies, Ottawa is contemplating a bigger future,” PwC said in its report. “With a new light-rail transit system and a focus on intensification, construction activity can be found in every corner of the city.”
The report also highlighted how some real estate companies, priced out of opportunities to purchase premium properties in Vancouver and Toronto, are turning to markets such as Ottawa where they can find “well-positioned trophy assets,” according to one respondent to the PwC survey.
The finding mirrors a recent Avison Young report, which argued that a pair of landmark office building sales in 2017 – Investors Group’s $188-million deal in March to acquire a 50 per cent stake in Minto Place followed by the blockbuster $480-million sale of Constitution Square – have piqued investors’ interest in the National Capital Region and are driving the local market to another banner year in 2018.
The PwC report also touched on housing markets across the country and found that the number of rental units under construction in Ottawa has skyrocketed over the past decade, from a mere 170 units in 2007 to 1,856 last year, according to data from the Canada Mortgage and Housing Corp. That’s a jump of a whopping 992 per cent, eclipsing the national increase of 226 per cent over the same time period.
PwC suggested that many developers made the switch after being confronted with a large inventory of condo units. Many of these units will be completed within the next two years, virtually doubling the rental supply in some parts of the city. However, even with the increase in inventory, survey respondents said they believed rents would remain at an all-time high.