A study from the City of Ottawa suggest that thousands of homeowners are experiencing heightened vulnerability in the housing market due to soaring mortgage rates and costs.
According to the 2024 Housing Needs Assessment, the proportion of homeowners in Ottawa paying $2,000 or more per month for housing costs nearly tripled from 2006 to 2021 (from 11.5 per cent to 34.2 per cent).
The percentage of homeowners paying between $1,500 and $1,999 per month dipped from 20.4 per cent in 2006 to 17.8 per cent in 2021.
The proportion of homeowners paying less than $500 per month for housing also decreased by nearly three quarters, while the percentage paying $1,000 and $1,499 a month dropped by almost half.
The report also said the proportion of homeowners paying between $500 to $999 a month increased slightly from 29.1 per cent in 2006 to 31.5 per cent in 2021.
“Affordability in Ottawa’s ownership market has consistently eroded, with fewer households able to secure housing at lower costs,” the report read.
“Yet, despite these cost changes, median home prices have remained relatively stable, suggesting that ownership expenses are being driven more by higher borrowing costs, taxes and other financial pressures than by price inflation alone.”
The report said median housing prices increased by 1.6 per cent year-over-year from December 2023 to December 2024, from $620,000 to $630,000.
By housing type, the largest increase was in median townhouse prices, which increased from $550,000 to $580,000 (5.5 per cent increase). This is followed by apartments, which increased from $390,000 to $398,000 (2.1 per cent increase) and single-family homes from $750,000 to $755,000 (0.7 per cent increase.
However, median housing prices jumped by more than 64 per cent since 2018, when the median housing price was $382,952.
Meanwhile, housing starts have fallen. The number of housing starts peaked between 2020 to 2022, when numbers were consistently above 11,000. However, that number dipped to 9,245 in 2023 and 6,800 in 2024.
“Housing starts have fallen to a decade-low, limiting future supply growth,” the 2024 Housing Needs Assessment reads.
“Planned zoning changes may create opportunities for more diverse housing options. Still, with rising development costs and economic constraints on construction, affordability improvements will likely remain constrained in the near term.”
Thousands of Ottawa homeowners in core housing need
Core housing need (CHN) is said to be a key measure of housing instability, according to the 2024 Housing Needs Assessment. It identifies households that lack adequate, suitable and affordable housing without access to alternatives in their local market.
It is also a measure of heightened vulnerability within the housing market, the report added, with many residents spending well beyond affordability thresholds.
“Households in CHN are not necessarily at risk of homelessness, but do face heightened vulnerability, with many spending well beyond affordability thresholds with few viable options,” the report said.
According to the report, there were 92,895 people in CHN in Ottawa in 2021. The largest group was those aged 25 to 54 at 34,025 (36.6 per cent). Around 25,295 people were children and youth aged zero to 17 years (27.2 per cent) and 15,220 people were seniors aged 65 years and over (16.4 per cent).
The groups with the fewest people in CHN were young adults aged 18 to 24 years at 8,630 people (9.3 per cent) and older adults aged 55 to 64 years at 9,725 people (10.5 per cent).
“Over 25,000 children and youth live in households in core housing need, placing added strain on parents and caregivers who must balance housing costs with other essentials. Children in core housing need may face disruptions in education and social stability, particularly if housing conditions are unstable,” the report read.
The report also suggested that the number of owner households in CHN decreased from 12,655 in 2016 to 11,865 in 2021.
Proportionally, 26.7 per cent of all households in CHN in 2021 were owner households. This is a slight decrease from 2016, when it was 26.8 per cent.
City staff suggested that the decline in homeowner CHN numbers was likely influenced by temporary income supports during the early days of the COVID-19 pandemic, such as the Canada Emergency Response Benefit (CERB).
The report noted that many households that briefly exited CHN in 2021 may have re-entered in subsequent years.
The majority of households in CHN are also considered very low income or low income. Around 62.1 per cent of households (both renters and homeowners) in CHN in 2021 were considered very low income, while 48.1 per cent were considered low income.
“While the proportion of households in core housing need decreased from 2016 to 2021, this does not necessarily reflect long-term improvement … Core housing need remains prevalent among very low- and low-income households, reinforcing the direct link between affordability and financial constraints,” the report read.
