Deciding whether to buy or rent in Ottawa can be challenging, especially with rising rents and fluctuating property prices. 

Both options have their pros and cons, and the right choice depends on your financial situation and long-term goals.

In this blog, we’ll explore the financial aspects of buying versus renting, including monthly costs, potential long-term gains, and hidden expenses. 

We’ll provide you with the key information you need to make a smart, informed decision. Read on!

Understanding the Ottawa Housing Market

The Ottawa housing market has seen some interesting changes in 2024. In November, the average home price was $667,098, which is 5.4% higher than November 2023 but slightly lower than October 2024. 

The benchmark price, which represents a typical home, was $636,700—up 1.5% from last year but down slightly from the previous month. Single-family homes sold for an average of $786,626, a 4.2% increase from 2023 but a small drop compared to October. 

Townhouses were a hot ticket, with prices jumping 11% to $582,892. Apartments, however, saw a dip, with the average price falling to $422,570—down 4.8% from last year.

There are more homes on the market now, with 4,036 active listings in November, a 38.2% increase from 2023. Despite this, it’s still a seller’s market, with just 3.8 months of inventory available. 

Homes are taking longer to sell, though. In the third quarter of 2024, single-family homes took about 22 days to sell, compared to 17 days last year. Townhouses and row houses took 21 days, up from 17, and apartments stayed on the market for 31 days, compared to 20 days in 2023.

Several factors are shaping Ottawa’s housing market. The city’s stable economy, supported by government jobs and a growing tech industry, attracts people from across Canada and abroad. Ottawa’s reputation as a safe and welcoming place makes it a popular choice for homebuyers. 

Recent cuts to interest rates have also made buying more appealing, which has boosted activity in the market. All these elements are shaping Ottawa’s real estate trends as we head into 2025.

The Financial Aspects: Renting vs Buying in Ottawa

Monthly costs for renting versus buying in Ottawa can vary significantly.

For example, the average rent for a two-bedroom apartment is about $2,500 per month. 

A monthly mortgage for a similar property could cost around that amount as well. For instance, if the average home price is $667,098, assume that there is a 20% down payment ($133,419) and a 25-year mortgage at a 4.14% interest rate. The monthly mortgage payment would be about $2,600.

Renting often seems cheaper at first glance because you don’t have to worry about extra costs. Renters typically deal with fewer surprise expenses since landlords take care of maintenance and repairs. However, renters don’t build equity and may face rent increases, making it less stable financially in the long run.

On the other hand, homeowners have additional costs to consider. Property taxes, insurance, and maintenance can quickly add up and increase monthly expenses. Unlike renters, homeowners are responsible for repairs, which can lead to unexpected out-of-pocket expenses.

Despite the higher costs, owning a home usually offers better financial benefits in the long term. This is because homeowners build equity as they pay off their mortgages. Equity is the portion of the home you own, and it grows over time as you pay down the loan and as the property’s value increases. This equity becomes a valuable financial asset that can help with retirement planning or other financial goals.

While owning a home comes with added responsibilities and upfront costs, it provides stability and the potential to build long-term wealth—something renting cannot offer.

Tips for Prospective Renters in Ottawa

Finding a rental property in Ottawa can be competitive, but with the right approach, you can secure a place that fits your budget and lifestyle. Here are some tips to guide you through the process.

1. Budget Wisely:
Before renting, plan your budget carefully. Rent costs in Ottawa vary widely based on location, size, and type of housing. For example, apartments downtown are typically more expensive, while those in the suburbs are more affordable. Don’t forget to include additional expenses like utilities, internet, and parking fees.

2. Choose the Right Location:
Select a neighbourhood that matches your lifestyle. Think about its proximity to work, schools, or activities you enjoy. A convenient location can save time and make daily life easier.

3. Check Listings Regularly:
The rental market moves quickly, so staying on top of online property listings is crucial. Acting fast when you find a good property can make all the difference in securing a rental.

4. Prepare Your Documents:
Landlords typically ask for proof of income, references, and identification. Having these documents ready can give you an advantage and speed up the application process.

5. Inspect Properties:
Before signing a lease, inspect the property thoroughly. Check for maintenance issues or repairs needed and discuss them with the landlord to avoid surprises after moving in.

Tips for Prospective Homebuyers in Ottawa

Buying a home in Ottawa is a big decision, and careful planning can help make the process easier. Whether you’re a first-time buyer or upgrading your home, these tips will guide you through the essentials.

1. Set a Realistic Budget:
Buying a home involves more than just the mortgage payment. Include land transfer tax, legal fees, property taxes, insurance, and maintenance in your calculations. Understanding all the costs upfront can help you avoid financial stress later.

2. Plan for Maintenance Costs:
Owning a home means being responsible for repairs and upkeep. While these costs can vary, it’s wise to set aside a budget for unexpected expenses.

3. Consult a Mortgage Advisor:
A mortgage advisor can provide helpful guidance on interest rates, market conditions, and the best time to buy. This professional advice can make the process smoother and more informed.

4. Explore Government Programs:
Look into options like the First-Time Home Buyer Incentive, which offers financial support to reduce upfront costs. These programs are especially helpful for new buyers.

5. Understand Hidden Costs:
Beyond the purchase price, owning a home comes with ongoing expenses like property taxes, insurance, and occasional repairs. Being prepared for these costs ensures you’re financially ready for homeownership.

By following these tips, renters and buyers in Ottawa can make smarter decisions that suit their financial and lifestyle goals.

Final Words

Understanding the Ottawa housing market requires staying up to date on trends and carefully weighing your options. Whether you’re looking at renting or buying, it’s important to consider recent market stability, rising property sales, and how these factors align with your financial and lifestyle goals.

When comparing the costs of renting vs buying in Ottawa, think about your long-term financial plans. Renting can be more flexible and involve fewer responsibilities, but it doesn’t build equity. Buying, on the other hand, offers stability and the potential to grow your wealth over time, though it comes with higher upfront and ongoing costs.

Both renting and buying in Ottawa have their pros and cons. Your choice should reflect your current situation, financial readiness, and personal priorities. By staying informed and positive, you can make a decision that supports your goals and ensures a bright future in Ottawa’s thriving housing market.

Make the Right Choice with Lyne & Dominique

Deciding between renting and buying in Ottawa is a big step, and having the right guidance makes all the difference. Whether you’re looking for a downtown condo, a suburban rental, or a home to call your own, Lyne Burton & Dominique Milne are here to help you navigate Ottawa’s housing market with ease.

As trusted local real estate experts, we’ll help you weigh the pros and cons of renting vs buying in Ottawa. From understanding costs like property taxes and maintenance to finding a property that matches your lifestyle and long-term goals, we’re committed to helping you make the choice that’s perfect for you.

Start your journey today, and let us make living in Ottawa everything you’ve dreamed it could be! Contact us now to take the first step.