It should be another busy year for the Ottawa real estate market,” says Patrick Morris. “The city continues to enjoy steady growth, interest rates remain attractive, and the region’s unemployment is low, with the primary employers (government and high-tech) on solid footing.”
Last year, members of the Ottawa Real Estate Board sold 17,476 residential and condo properties, increasing sales by 2.4 per cent over 2017, when they sold 17,065 homes.
“The condo market was the bright star in Ottawa in 2018, capitalizing on the high demand for properties that couldn’t be met in the residential sector,” says Patrick, noting that the number of condo sales last year increased 13.1 per cent over 2017, with 4,058 units sold in 2018 versus 3,587 sold in 2017.
“Overall, the residential sector of Ottawa’s real estate market was strong last year, despite the low inventory of properties for sale,” adds Patrick. “The number of sales in 2018 decreased slightly by 0.4 per cent from 2017. It would have eclipsed 2017’s production had it not been for sluggish sales numbers in November and December.” Two main issues accounted for the decline in sales at year end: early winter weather that was unfavourable for Ottawa buyers, and the low inventory of properties.
Rob Kearns of The Morris Home Team adds, “Prices will continue to move higher because of the upward pressure caused by this low inventory and high demand. You may see this levelling off in the summer, with a return to a more balanced market in the last half of 2019.”
The mortgage stress test introduced at the start of last year by the federal government to cool off major markets such as Toronto and Vancouver has had an effect on the Ottawa real estate market, particularly in some neighbourhoods. As Ralph Shaw, President of the Ottawa Real Estate Board, noted, “It has also unfortunately made move-up buyers less likely to take that step and free up entry-level options, which is an important part of the resale market.”
First-time buyers might have to look for affordable housing options outside the Greenbelt. That said, Kearns encourages prospective first-time buyers to get on the property ladder: “Just get into the market. If you look back, people who’ve waited to get in continually pay more and more. If it’s about home ownership, then it’s more than just an investment. It’s better to get in sooner rather than later. Prices are sticky in Ottawa—they won’t come down at the same speed they went up.”
The $300,000 to $449,000 price range was the most active for residential home sales in 2018, accounting for about 45 per cent. The average sale price rose just over 5 per cent from 2017 to 2018, rising to $446,661 by the end of last year. The real estate board cautions that average sale price can be useful to look at overall trends but should not be used to establish whether specific properties have gone up or down in value—that all depends on prices and conditions within neighbourhoods, and can vary even from block to block.
Within the condo market, half of units sold were between $175,000 and $274,999. Although the number of condo sales in 2018 went up considerably over the previous year, the average sale price of condos experienced a more modest 3.2 per cent increase, to $278,316.
All signs point to another good year for Ottawa’s real estate market, given continually low interest rates, healthy employment figures, and developments such as the LRT.