Ottawa investment market report
H1 2024
Investment market trends
01 - Rate cuts positively impact consumer confidence
After ten consecutive hikes over 18 months, the Bank of Canada dropped its rate by a total of 75 points between June and September of 2024. Further decreases are expected in the remainder of this year and into 2025.
New buyers and institutional players are slowly re-entering the market, but it may take a few more rate cuts to solidify investor sentiment that the market has recovered. However, there is a sense of optimism heading into H2 2024.
02 - Private investors remain most active
Over the last 18 months, most private investors adjusted their investment and asset allocation strategies to consider the increased transactional risk, as many pension funds and institutional investors were temporarily sidelined. This created opportunity for private investors to add new assets to their portfolios.
Prevailing market dynamics have prompted lenders to adjust their strategies, emphasizing safeguarding capital rather than making it available. Despite this, capital remained available for well-qualified assets and creditworthy borrowers, with a particular preference for industrial and multi-residential asset classes. Lenders continue to be wary of office assets, but are willing to release capital if they have an existing relationship with the buyer, and know they have a proven track record.
03 - Multi-family continues to be the preferred asset class for investors
Multifamily remains the preferred asset class for investors in Ottawa, closely followed by retail assets, especially those that are anchored by medical tenants or grocery stores. There is still a positive sentiment for industrial assets, but fewer transactions have been recorded due in part to the lack of supply. Office assets remain least desirable, but some private buyers still see value in suburban locations with strong tenant covenants.
Most investors remain well-capitalized with ample ammunition ready to deploy. As the debt market continues to improve, and rate cuts intensify, it is expected that transaction volumes will increase.
Ottawa investment activity
Canadian private investors
Canadian private investors
Government investors
Others (developers, users, builders)
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