While housing markets across Canada are heading into a nosedive as a result of the COVID-19 crisis, home sales in Ottawa should continue to boom over the next several months thanks to the region’s solid employment base, according to a new report from a B.C.-based real estate organization.
In a study released this week, the Real Estate Investment Network predicts Ottawa will be the only one of the five major Canadian markets it surveyed that will avoid a housing slump in 2020.
The organization says after analyzing real estate markets in Vancouver, Calgary, Edmonton, Toronto and Ottawa based on factors such as GDP, jobs and population, it determined that all of them are in the beginning or the middle of downturns – except the nation’s capital.
“Ottawa emerges as an outlier in the current pandemic landscape partly because as the seat of Canada’s federal government, it’s insulated to some extent from the massive pandemic-related joblessness impacting the country,” Jennifer Hunt, the group’s vice-president of research, said in a statement.
In its latest “special edition” report released in the wake of the coronavirus pandemic, the organization says it considers Ottawa to be in the “beginning to middle” of a housing boom. REIN suggests now is the time for investors in the capital looking to “fix and flip” residential properties for quick returns, while conditions aren’t as promising for those who want to buy and hold properties or rent to own.
The most recent figures from the Ottawa Real Estate Board seem to support the report’s conclusions. The board says housing prices in the capital have not taken a major hit despite rising unemployment fuelled by measures aimed at curbing the spread of the virus that causes COVID-19.
Although the board said the total number of resale transactions in the city plummeted 55 per cent in April compared with a year earlier, the average sale price of a residential-class property still rose 6.8 per cent in the same period to nearly $522,000, while condo prices were up 6.3 per cent to an average of about $328,000.
“While the number of unit sales has decreased substantially, residential prices are still holding their own and are up over last year’s figures, with properties often selling above the asking price,” OREB president Deb Burgoyne said earlier this month.
The news isn’t as good for those looking to sell properties in the other cities the group surveyed. The impact of COVID-19 on key economic indicators “will move most markets further into the slump phase in the coming months despite provinces gradually re-opening their economies,” the report said, suggesting that current conditions in cities such as Calgary and Edmonton favour homebuyers who plan to hold on to their properties for the long haul.
“We may not be able to direct these market forces, but we can control how we respond – employing exactly the kind of ‘pandemic pivot’ we need to protect our property during these turbulent times,” Hunt said. “The key will be in watching for indications of recovery, such as economic activity, employment, immigration and new rental demand.”