Ottawa's vacancy rate went up, but so did average rents in 2019 - Ottawa Citizen - Canada News Media
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Ottawa's vacancy rate went up, but so did average rents in 2019 – Ottawa Citizen



Rental properties in downtown Ottawa. August 8, 2018. Errol McGihon/Postmedia

Errol McGihon / Postmedia

While it might have become a little easier to find a rental in Ottawa in 2019, it also got more expensive to cover the rent, on average.

That’s the big take-away from the Canada Mortgage and Housing Corporation’s 2019 rental market report for the Ontario side of Ottawa-Gatineau, released Wednesday.

While the national vacancy rent for rental apartment units shrank for the third year in a row to 2.2 per cent, the same vacancy rate in Ottawa rose slightly, from 1.6 per cent in 2018 to 1.8 per cent in 2019. It’s the first year since 2015 that the vacancy rate in the capital has eased rather than tightened.

Important to note, however, is that this uptick was driven by an increased bachelor apartment vacancy rate — the movement in vacancy rates for all other bedroom-count units was not statistically significant.

Anne-Marie Shaker, an CMHC analyst, explained that Ottawa was well-past due for new rental apartment construction. “We had an aging purpose-built apartment stock, most of the apartment stock was built in the ’70s and ’80s,” she said. 

With new supply coming online, and rental construction slated to continue, “We do expect … that the vacancy rate will go up slightly,” said Shaker. At the same time, “the demands still remain strong for Ottawa, even though we’re seeing rising supply.”

CMHC cites steady net migration to Ottawa as a factor pushing this demand — newcomers tend to rent for their first few years in Canada. So too is “strong employment growth” among the students and young professionals who make up much of the rental market.

Local and international students at Ottawa’s universities and colleges are also “a key force for rental demand” in the city, according to CMHC.

As the appetite for rentals accommodations remains strong, don’t expect bargain basement rents. In 2019 the average rents in Ottawa for bachelor and one-bedroom apartments were $933 and $1,178, respectively, and rose 6.8 and 8.1 per cent between 2018 and 2019. 

The capital saw higher rent growth than the country as a whole. While the average rent for a two-bedroom apartment in Ottawa was $1,410 in 2019, and up eight per cent from the year before, the same measure only rose 3.9 per cent nationwide over the same period and the average two-bedroom rent in Canada was $1,077 in 2019.

In addition to healthy demand, Shaker includes new rental construction and low tenant turnover among the reasons for Ottawa’s higher-than-average growth in rents.

“Stricter mortgage rules, low resale supply and rising MLS average prices may have pushed down turnover rates as households chose to continue to rent over transitioning into home ownership,” the CMHC report notes.

Relative to Canada’s largest cities, Ottawa is still pretty affordable.

Compared with $1,410 in the capital, the average rent for two-bedroom apartment in Toronto was $1,562 in 2019. In Vancouver it was $1,748.

But in Calgary and Edmonton, the average was $1,305 and $1,257, respectively.

Quebec, as usual, is in a league of its own. In Montreal, the two-bedroom average was $855 while in Gatineau, it was $874.

Among Ottawa neighbourhoods, the vacancy rate was highest and went up the most in Sandy Hill/Lowertown between 2018 and 2019, rising to 2.7 per cent. The runner-up was downtown, where the vacancy rate rose to 2.6 per cent. Chinatown/Hintonburg wasn’t far behind, with a 2.3 per cent vacancy rate.

Most of the new rental supply in 2019 was in Chinatown/Hintonburg and Sandy Hill/Lowertown, “explaining the upward pressure on the vacancy rate in those zones,” CHMC concludes.

Downtown, the buoyant vacancy rate was thanks in large part to expensive two-bedroom units. The average asking rent across vacant two-bedrooms was 17 per cent higher downtown than the city’s average and at $1,798 was the highest in urban Ottawa — likely leading to a higher vacancy rate for this particular unit type.

A similar phenomenon was seen in west Ottawa, including Kanata, where the average asking rents on vacant two-bedrooms were 62 per cent higher than Ottawa’s average, “likely contributing to an increase in the vacancy rate,” according to CMHC.


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TSX expected to shatter records in 2020 – CTV News



TORONTO — Canada’s main stock index is expected to shatter records in 2020 after starting the year up nearly three per cent to date, says an investment expert.

The S&P/TSX composite index should gain at least 10 per cent for the year, pushing it to about 19,000 points while outpacing U.S. markets, says Macan Nia, senior investment strategist at Manulife Investment Management.

“That is our base case and there’s potential risk to the upside,” he said in an interview after the market capped a strong week by hitting another record high.

Nia said markets are being propelled by stabilization in the global economy and low interest rates which central banks are unlikely to increase in the face of little inflation.

“There’s nothing in near sight that would suggest that the party can’t continue.”

A catalyst for a correction or pullback could be disappointing earnings results, he said, noting that when valuations get high it only takes something minor to get a pullback.

Another could be the result of the Democratic primaries if Bernie Sanders or Elizabeth Warren win the party’s nomination to take on U.S. President Donald Trump.

Either one would provide a “headwind for capital markets” Nia said, noting their calls to break up big tech companies that have driven stock market gains.

Former New York City mayor and businessman Michael Bloomberg and former U.S. vice-president Joe Biden are viewed as the most pro-business among leading candidates.

For now, there’s a lot of optimism as the Phase 1 trade agreement between China and the U.S. has tamed investor anxiety.

The S&P/TSX composite index closed up 74.25 points at 17,559.02 after trading at a record high of 17,572.15.

In New York, the Dow Jones industrial average was 50.46 points at 29,348.10. The S&P 500 index was up 12.81 points at 3,329.62, while the Nasdaq composite was up 31.81 points at 9,388.94.

The TSX gained 1.9 per cent last week and 2.9 per cent year-to-date after gaining more than 19 per cent in 2019.

“A good end to a great week to a great start to the year followed by a great 2019,” Nia said.

Markets were propelled by strong U.S. housing starts that were at the highest level since 2006 and factory output improving 0.2 per cent in December.

Although Chinese economic growth slowed to a 29-year low of 6.1 per cent last year amid a trade war with the U.S., the weakness seems to be normalizing, he said.

“That’s providing optimism for markets that we’re towards the end of this weakening and that we might be seeing an inflection point.”

The Canadian dollar traded for 76.56 cents US compared with an average of 76.66 cents US on Thursday.

The key energy sector was the only one of 11 major sectors on the TSX to fall on Friday, led by a 4.1 per cent decrease in shares of Encana Corp. as natural gas plunged to a near four-year low.

The March crude contract was up five cents at US$58.58 per barrel and the February natural gas contract was down 7.4 cents at US$2.00 per mmBTU.

Materials was part of a broad-based rally, ending the day higher led by First Quantum Minerals Ltd. and Teck Resources Ltd. They climbed on higher gold prices as oil rigs increased in the U.S. for the first time in a couple of weeks and the possibility that 20-year U.S. bonds could weaken the U.S. dollar.

The February gold contract was up US$9.80 at US$1,560.30 an ounce and the March copper contract was down 0.15 of a cent at US$2.85 a pound.

“It just shows the general positive animal spirits for the markets at this point that’s just a continuation of what we saw last year where you’re seeing all sectors rise together.”

This report by The Canadian Press was first published Jan. 17, 2020.

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Ontario ticket takes Friday night's $50 million Lotto Max jackpot – CTV News



A single winning ticket was sold in Ontario for the $50 million jackpot in Friday night’s Lotto Max draw.

The draw also offered two Maxmillion prizes of $1 million each, but neither were won.

The jackpot for the next Lotto max draw on Jan. 21 will be approximately $12 million.

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Bombardier's future in question, seeks debt-reduction – Business News –



The future of Bombardier Inc. is being called into question after the company said it was actively considering alternatives to reduce its staggering debt.

After exiting the commercial aircraft business, selling its aerostructures unit and unloading a large tract of land in Toronto, the company said it is working to reduce debt and “solve its capital structure.” Bombardier’s long-term debt stood at more than US$9 billion as of Dec. 31, 2018.

“We are actively pursuing alternatives that would allow us to accelerate our debt paydown. The objective is to position the business for long-term success with greater operating and financial flexibility,” it said in a news release Thursday that warned about weaker financial results for 2019.

What that means is unclear, says Walter Spracklin of RBC Capital Markets.

“The company’s rather opaque language about accelerating its strategic review to ‘solve’ its capital structure will require further clarity,” he wrote in a report.

The language suggests some urgency and not just pushing out debt maturities, added Seth Seifman of JP Morgan.

“This suggests to us the potential to pursue strategic options, including a breakup and sale of all or part of the company,” he wrote. “It may include one or both of Bombardier’s two major businesses: bizjets and trains.”

Bombardier’s shares plunged more than 30 per cent to their lowest level in nearly four years following its release which pointed to a possible withdrawal from a partnership with Airbus in the commercial aircraft previously called the C Series.

The company said its financial miss is mainly due to actions taken to resolve challenging rail projects, the timing of milestone payments and new orders and the delivery of four business jets slipping into the first quarter of 2020.

The stock was down 54 cents at $1.25 in afternoon trading on the Toronto Stock Exchange.

The Montreal-based company said it is reassessing its ongoing participation in the Airbus partnership about two years after giving up a controlling stake in the program to Europe-based Airbus SE.

Airbus owns 50.06 per cent of the joint venture, Bombardier 33.58 per cent and Quebec 16.36 per cent after injecting US$1 billion in 2016.

While the A220 program is gaining orders as it proves its value, additional cash will be required to support the ramp-up of production, a delay in reaching break-even and lower returns over the life of the program, it said in a preliminary announcement of its fourth-quarter and 2019 results set to be released Feb. 13.

“This may significantly impact the joint venture value,” Bombardier said, adding it will disclose any writedown next month.

Bombardier said it expects consolidated revenue for 2019 to total about US$15.8 billion and consolidated adjusted earnings before interest, taxes, depreciation and amortization of about US$830 million.

A total of 58 aircraft were delivered in the fourth quarter and 175 for the full year, including 11 Global 7500s.

Industry analysts called the financial warning negative with some cutting their price target for Bombardier’s shares.

“The key question is how much closer is the company to solving these issues, and what comfort can we get that new issues of similar scope and magnitude will not recur,” added Spracklin.

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