Ottawa, once known as a “sleepy” city with a slow real estate market, has seen unprecedented growth over the past two years. While you might wonder if the rapid rise in home prices means the value of your home has now peaked, you could be surprised to learn that the statistics show otherwise. Last month, Engel & Völkers released their end of year market report highlighting notable trends, economic factors impacting the market, changing buyer and seller preferences, and more. I have highlighted below a few key takeaways that I think will have quite a significant impact on the value of your home this coming year.
- The country-wide supply crisis. The supply crisis throughout Canada has significantly impacted the country’s real estate market as a whole. Throughout 2021, the supply of homes was consistently consumed by the increasing demand of buyers. The low supply of homes has proven to be the number one cause for the rapid increase in home prices across Canada’s major markets. Heading into 2022, the prices will only continue to rise unless supply and demand equalize.
- Interest rate increases on hold, but for how long? After historically low-interest rates in 2021, last Fall the Bank of Canada announced it would be increasing these rates once the economic slack had been absorbed. This created a sense of urgency in buyers and put immense pressure on the market’s supply. According to the end of year market report, low interest rates mean buyers should remain highly motivated—but for how long? The Bank of Canada is expected to increase interest rates at some point this year, and while that may curb some buyer demand, I don’t expect this will be enough to put the brakes on rising home values.
- Luxury home sellers will be Gen X and Millennials. According to the end of year market report, it is expected that more than 80 per cent of home sellers in 2022 will be Gen Xers and Millennials, and 31 per cent of them will be selling a home for the first time. The report states that approximately 81 per cent of luxury home sellers live in urban centers, meaning this could have a strong impact on home values in downtown Ottawa.
Overall, 2021 was an extraordinary year for Ottawa real estate with many unexpected trends. These changes in the market are sure to make an impact in 2022; it should be another exciting, fast-paced year for buyers and sellers.
Would you like your own copy of the Engel & Völkers end of year market report? I would be delighted to provide you with one and answer any questions you may have on what our market’s unprecedented growth means for the value of your home.
A real estate advisor with Engel & Völkers Ottawa, Caroline chose to return to her beloved city in 2019 after a distinguished career in corporate Canada working in various regions throughout the country. With her business savvy, marketing expertise and ambition, Caroline became publisher of the Ottawa Business Journal and several renowned and iconic magazines, including Elle Canada, Canadian Living, Style At Home, and many more. Caroline is dedicated to the Ottawa community, particularly with issues that affect women and children; she has received distinction as both a Forty Under 40 Award winner and a Queen’s Jubilee Medal for her commitment to these issues and her business accomplishments. https://carolineandrews.evrealestate.com/
