The State of the Ottawa Housing Market … and how it affects you

In a recent interview, Jason Ralph, Broker of Record and President of Royal LePage Team Realty in Ottawa, spoke candidly about the current market conditions in the Capital Region and its recovery from the peak frenzy of pandemic buying and selling.

Growth of the region

“Our industry is very resilient, and the Ottawa area certainly reflects that,” states Jason. “Immigration policies have supported our market, encouraging immigrants arriving to Canada in the past year to choose Ottawa to be their new home.

It’s a city with lots of amenities like good hospitals, national sports teams, excellent schools, a healthy job market, lots of green space and amazing communities.

With over a million people now, newcomers feel like they get the culture and excitement of a big city but that the properties are not priced so high that they’re unattainable as in larger cities like Toronto and Vancouver.”

Ottawa’s Luxury Market

Jason is proud to report that the luxury market in Ottawa is very strong “Now, high-end luxury homes in this region are in the one-and-a-half to three million dollar range, as opposed to Toronto or Vancouver, where it could be in the tens of millions of dollars. Our luxury market is much more appealing and attainable, compared to other cities in Canada.”

Post pandemic conditions

“In Ottawa, we have remained in a sellers’ market where prices have held strong and interest rates have not had as much of an impact as there’s been in some other markets.” says Jason.

When asked to explain that further, he responded, “It has slowed things down a bit because buyers are a little more hesitant about whether they should be going with a variable mortgage rate or a locked-in rate for two or even five years at the current higher rate.”

Looking to the conditions as we go into the fall, he has a positive attitude, “I think there will be more confidence-building as we go into the fall market, where signs point to interest rates going down and not up in the near future. I see buyers’ confidence on the uptick now as the market remains strong and clearly normalized.”

 

A calmer housing market?

How has the market changed since the peak has passed? Jason explains, “We do have somewhat fewer new listings now, and also the panic of competitive bidding has calmed down. Though, on the rare occasion in certain pockets of the market we still may get multiple offers, it’s more like three or four, not thirty or forty as it was during the peak of the pandemic.”

He continues, “In August, our CDOM (Cumulative Days on Market) for properties was just 43 days. That’s a very positive position for buyers and sellers alike. The market in the Ottawa area is still very tight. Fall is typically strong, and we expect that to continue.”

“If we get a positive message from the Bank of Canada, that could encourage buyers to be more confident in going out and purchasing a home. Buyers are now understanding that their rates should be lower the next time they refinance and that should be in the next two to three years. Confidence from buyers is coming back; and confidence from sellers is coming back because prices are holding strong.”

 

Pressure on the re-sale market

Why are many potential homeowners choosing re-sale over new construction? Jason posits, “New construction can be somewhat speculative, you’re purchasing a home that you aren’t moving into for potentially up to two years from now. There’s hesitation of a bubble due to the media even though prices have been holding strong. Builders have historically financed their construction and with financing rates the way they are, they would literally be building houses for free right now.”

When asked if the supply chain plays into that, he replies, “From what I’m hearing, the supply chain is not an issue anymore. The cost of building new homes is high, and it’s mostly because of interest rates. The cost of supplies has come down and the cost of labour seems to have stabilized. It’s the interest rates that are delaying new projects. That puts pressure on the re-sale market, which is why prices are staying strong.”

 Jason Ralph and his team of full-service REALTORS® at Royal LePage Team Realty are happy to speak with you about your property needs, whether you are buying or selling – or both. Serving the entire Capital Region, they provide a convenient experience for all their clients. Visit their website at teamrealty.ca.

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