You can learn a lot about a city through its public transportation system. From its key streets, suburbs, and shopping centers, navigating from point A to point B on public transit reveals much about a city’s priorities in environment, technology, urban planning, cleanliness, and culture. The friendliness of people in the subway, the efficiency of transit routes, and the inclusivity of the service all provide insights into the city’s character and values.
When Ottawa opened its light rail transit, O-Train Line 1, to the public in September 2019, it was exciting to see how it would transform Canada’s capital city. The LRT spans 12.5 km from Tunney’s Pasture in the west to Blair in the east, with a 2.5 km downtown tunnel and 13 stations (four of which are underground), creating a much-needed addition to Ottawa’s public transit system.
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However, six months after its grand opening, the onset of the pandemic and COVID-19 lockdown restrictions in March 2020 caused a significant shift in public transportation needs and lifestyles, as people were encouraged to stay home and minimize contact with others.
As we mark the five-year anniversary of the O-Train Line 1, we examine its impact on Ottawa’s housing market using data from the Canada Real Estate Association (CREA) and Rentals.ca to see how it might have shaped the city’s growth.
Return to Offices Reinforces Critical Role of Ottawa’s LRT
During one of the most popular return-to-office periods, Ottawa real estate prices soared to their highest levels in five years. Single-family home prices peaked at $768,400 in January 2022, while townhouse prices reached $547,400, and apartment prices hit $452,400, both their highest, by July 2022. This time coincided with a significant return to office, ending fully- remote work schedules for many. By May 2022, Stats Canada reported that 77.6% of people were back in the office and 80% by 2023. The same study also highlighted an 83.2% increase in public transit commuting in Ontario from spring 2021 to 2023, reflecting the return to hybrid or onsite work.
So far in 2024, the Ottawa market continues heating up, with the Canadian Real Estate Association (CREA) reporting a 14.5% rise in sales for single detached homes and townhouse/row units in Ottawa, and a 9.9% increase for apartment units year-over-year.
How Ottawa's Rent Prices Have Shifted Since 2019
2023 marked the first year without COVID lockdown restrictions in Ontario, and with that, rental prices also reached their peak. Since January 2023, renting a one-bedroom apartment in Ottawa requires a monthly budget of about $2,000. The same amount could rent a two-bedroom apartment back in 2019, which now costs $2,500.
Although the average price of a one-bedroom apartment saw a slight decrease over the period, the fluctuations were relatively minor. In contrast, two-bedroom apartments experienced more significant changes, resulting in a slight average increase. The increased demand for two-bedroom apartments may be attributed to more people needing extra space for work-from-home arrangements during the early phases of the pandemic and lockdowns.
"Rent prices are generally higher near LRT stations in Ottawa. The convenience of easy access to public transportation significantly increases the desirability of properties located near these stations, leading to higher rental prices. Areas near popular LRT stations such as Tunney's Pasture, Rideau, and Hurdman tend to have higher rents due to their central locations and connectivity to major city amenities and employment hubs," said local eXp real estate agent Dimitrios Kalogeropoulos.
Ottawa's Affordability Advantage Over Other Ontario Cities
Despite recent rent hikes, overall, Ottawa’s home prices remain relatively affordable compared to other Ontario cities. According to recent April 2024 stats from CREA, the non-seasonally adjusted residential home price in Ottawa was $643,700, making it nearly $100,000 more affordable than the national benchmark of $735,900. Among major Ontario cities, Ottawa remains the most affordable, with average home prices at $859,600 in Hamilton-Burlington, $745,000 in Kitchener-Waterloo, and $801,600 in the Barrie District.
As the city’s most extensive public transportation investment to date, Ottawa's LRT stations now link key areas such as downtown, suburbs, and employment hubs as well as popular tourist spots. This improved accessibility makes the LRT system appealing to home buyers, potentially increasing property values and strengthening investments, and of course, making commuting easier during the city's cold winters. At the same time, increased demand for housing in these popular areas can also mean that it might be more challenging to enter the market for first-time homebuyers.
"While some homes may be valued higher due to proximity to public transit, not all homes will be significantly more money due to the LRT station or other public transportation. At the end of the day the value of a property is determined by what a buyer is willing to pay for it and what a seller is willing to accept," Kalogeropoulos explains.
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