If you’re a homebuyer currently on the search, you don’t need me to tell you that Ottawa’s residential real estate market has bounced back dramatically from the brief lull we experienced in the early weeks of COVID-19.
With continued low inventory and high demand, multiple offers and quick sales have been common for months, particularly in the most popular neighbourhoods. Many properties are selling quickly and for over the list price. Not surprisingly, this has led to unusually strong price increases over the past year.
From January to August of this year, the average sale price for a condominium unit was $357,779, up 19 per cent from the same period last year. The average sale price of a residential unit, at $566,291, was up 17 per cent from the same period in 2019.
In a real estate market traditionally known for its stability and lower annual increases, some buyers are telling me they want to hold off their search in the hope we’re experiencing a bubble and prices will cool, as some forecasters are predicting.
In a report in June, the Canada Mortgage and Housing Corp. (CMHC) said prices in Ottawa are expected to remain strong this year but said the market could soften slightly in 2021 because of potential job and income losses. CMHC predicted a recovery in 2022.
However, these are simply projections, and as we Realtors often tell our clients, no one has a crystal ball.
Clients have to make their own decisions, because no one can predict with certainty what will happen to prices. If you are a buyer, it’s up to you if you want to hold off and keep your fingers crossed that average sale prices will go down.
It’s possible that will happen, and of course we don’t know yet if we will experience the second wave of COVID-19 that we’ve been warned about, which could affect markets across Canada.
But I also have heard from clients who held off and now regret it after seeing the increases our market has experienced over the past year.
So far, at least, we have seen no signs the Ottawa market is softening. Ottawa has long been known for its stable real estate market, for good reason. And demand remains high while inventory is still low.
Employment in our area tends to be stable and not as affected by the economy as some other cities are, thanks to generally solid sectors that include government, education and high tech.
In June, for example, news reports announced the unemployment rate in Ottawa had gone from less than five per cent before the pandemic to 14 per cent in May.
It dropped back to 9.2 per cent in August, but even in June, as one newspaper article pointed out, that increase in unemployment did not have an impact on house prices, partly because the hardest hit in those numbers were young and lower-paid workers, who aren’t buying $500,000 homes.
As the article pointed out, the traditionally solid sectors of public service, high tech, health and education together add up to about half of the total workforce in Ottawa. Those sectors so far have not been impacted by COVID-19 layoffs the way other sectors have.
As someone who has helped clients in Ottawa for more than three decades, I agree with Deb Burgoyne, president of the Ottawa Real Estate Board. In a recent email about the Ottawa market, she said:
We are blessed with an educated and diverse workforce, strong employment contributing to migration from other provinces, record-low interest rates and pent-up demand for supply. Although no one can say for certain, I don’t see a change in the near future.
If you’re interested in buying or selling residential property in the Ottawa area, I’d be happy to chat with you about the current market and conditions in your area. With more than 30 years of experience, I’ve helped hundreds of clients buy and sell, in a wide range of market conditions.
Nancy Benson operates a full-service office at RE/MAX Hallmark Realty and specializes in unique homes in the most desirable neighbourhoods of Ottawa.
Whether you’re buying, selling, acquiring an investment or a secondary home, we have a system that will work for you. You can read more about me and my team at www.nancybenson.com. Feel free to give me a call, at 613-747-4747.
