Ottawa’s new housing market is undergoing a major shift as condominium construction falls sharply and purpose-built rental apartments take over a growing share of development.
According to the Canada Mortgage and Housing Corporation’s Fall 2026 Housing Supply Report, Ottawa condominium apartment starts fell 49% year over year.
At the same time, purpose-built rentals now account for more than half of all housing starts in the region.
Ottawa Condo Starts Are Down 49%
The condo construction slowdown comes as developers face a challenging environment for launching new ownership projects.
CMHC says condominium starts fell 49% compared with last year.
High construction costs, financing challenges, weak presales and affordability pressures have made it difficult for many proposed condo projects to reach the sales levels required to proceed.
CMHC also notes that newly built downtown Ottawa condos can cost roughly the same as larger suburban townhomes, making the condo option less attractive to some prospective buyers.
Rentals Now Make Up 54% Of Ottawa Housing Starts
While condo construction is falling, rental development continues to dominate Ottawa’s new housing pipeline.
Purpose-built rentals represented 54% of housing starts in 2026, according to CMHC.
Condominium apartments represented only 12%.
Rentals also accounted for 64% of housing completions and an even larger 69% of all units currently under construction.
That’s up from 53% of units under construction a year ago and just 30% in 2023.
Ottawa Rental Construction Is Still Growing
Rental apartment starts increased 3% year over year.
Meanwhile, rental completions during the first half of 2026 were 64% higher than a year earlier.
Ottawa also has a record number of approved rental units waiting to begin construction.
But that does not necessarily mean every approved project will begin immediately.
CMHC says some projects are being delayed as developers wait for lower costs, better financing conditions or greater certainty in the market.
Ottawa Needs Far More Housing To Restore Affordability
Despite the rental construction boom, CMHC estimates Ottawa remains significantly short of the housing required to bring affordability back to pre-pandemic levels.
Under current trends, Ottawa is projected to build approximately 11,000 homes annually.
CMHC estimates the region needs around 33,000 to 38,000 housing starts per year to restore 2019 affordability by 2036.
That leaves a gap of approximately 22,000 to 27,000 additional homes every year.
In fact, CMHC says Ottawa’s estimated housing supply gap has grown compared with its previous assessment.
Ottawa’s Housing Market Is Becoming Increasingly Rental Focused
The numbers highlight a broader shift taking place across many Canadian cities.
Developers are increasingly building purpose-built rentals while construction of condos intended for ownership weakens.
That can provide much-needed rental supply in the short term.
But CMHC warns that weak condominium construction could eventually create fewer ownership options for buyers.
For Ottawa, the challenge is particularly significant because its overall housing construction pace remains well below what CMHC says is required to make housing more affordable.
Rental construction may be booming, but condo construction is moving rapidly in the opposite direction.
References
Canada Mortgage and Housing Corporation, Fall 2026 Housing Supply Report, September 10, 2026.
Canada Housing Market 
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