If you or your family is in the market for a house, you should know that real estate in Ottawa will not cool down any time soon. Rising interest rates and the uncertainty of finding a job will lower Ottawa’s red-hot home resale market a few levels this year, but not enough to freeze price hikes.
Ottawa Home Prices Stay High
Housing inventories are at historic lows in Canada, meaning there will be fewer, but more expensive homes to battle over this year.
Canada Mortgage and Housing Corporation (CMHC) said that house sales are expected to drop from 20,625 last year to 18,700-20,500 due to rising mortgage rates and declining employment. In addition, CMHC is forecasting a similar situation for 2023, with home sales between 17,400 and 20,200.
Regarding prices, Ottawa could hit $750,000 for a home this year, an increase of approximately 16% over the average of $648,099 in 2021. The average price is expected to rise even more in a few years, coming in at $795,000 next year and $840,000 in 2024.
What’s interesting is that 2021 has been excellent for housing construction in the country, and while this is fantastic news for homebuyers in the following years, it will not address the lack of supply they may need to contend with. On the other hand, the second half of 2022 is expected to bring a more balanced real estate market, providing buyers with more options.
Average Home Prices in Ottawa
Like most of Canada’s major cities, Ottawa has seen record growth related to housing prices due to the pandemic. As of April 2022, the average cost for a home in Ottawa was $757,225, while condominium prices were $473,700, showing a yearly increase of 11%.
Before the pandemic, the average home price was $442,00 at the end of 2019, rising to $525,000 at the end of 2020, an increase of 19.2%. Now, the average price of a home sits at a staggering $757,225. Despite the historical increases, sales volume was incredibly high throughout the pandemic, with total sales above $10 billion in 2020 and $13.1 billion in 2021.
As of April 2022, the average prices were as follows:
- Condo – $479,405 (10% year-on-year price change)
- Detached House – $853,615 (12% year-on-year price change)
- All property types – $757,225 (12% year-on-year price change)
While the housing market has seen considerable growth in Ottawa, its value is still far behind other major Canadian cities, such as Toronto, Vancouver, Hamilton, or London. However, Ottawa has become a superheated real estate market due to record immigration, pent-up demand, and buyers rushing to find the best possible rate.
Housing prices have not tipped over the $1M average price mark yet, but signs show that it will move toward it in the next couple of years. Thus, if you are looking to buy a house, condo, or duplex in Ottawa, it would be best to start chasing your ideal home. If not, you should save some money for a mortgage down payment.
But keep in mind that with low inventory, you will most likely pay more for the home of your dreams, which could offset the savings your low-interest rate has provided.