By Nancy O’Dea
This year has been turbulent for us as a nation and as a city because of COVID, but it does not seem to have affected the real-estate market, especially here in Ottawa. Low inventory levels have continued to be the challenge throughout the year, along with low interest rates. These factors combined have contributed to the tension in the home market, driving prices up significantly year over year. Condominium values finally began to climb after April, and we have begun to see an increase in purpose-built rental housing indicating that builders are feeling confident about the economy as well as the influx of new residents into the city.
Our group has frequently been asked about the sustainability of prices. Ottawa has always been a very stable market, enjoying consistent slow growth year over year. Toronto and Vancouver markets have experienced surges, and both were vulnerable to volatility.
Ottawa is now in the “surging” category, experiencing dramatic real-estate price increases over the last two years. It has been a stable yet undervalued market for so long, but no longer is. Now more than ever, investors see Ottawa as a safe place to invest because of that long-term stability and the current growth to perhaps more realistic prices in all residential segments. This is most evident when examining the luxury end of the market, where for many years the Ottawa market would predictably sell 3 to 5 properties per year over 3 million dollars and would hit the ceiling at about 3.6 million.
Of course, periodically, there may be an aberration, and we would see an exception. At the time of writing this piece, so far this year the Ottawa Real Estate Board has moved 22 properties over 3 million dollars and 9 of those have been over 4 million, with 3 properties selling for over 5 million.
The capital is evolving, with many new enterprising businesses coming into the city, broadening our employment base beyond the federal government. The pandemic has given many the opportunity to re-evaluate their lives and lifestyles and has encouraged them to consider options outside the downtown core. This has included shifting priorities to be more family-focused, the desire to integrate work and play under one roof with outdoor spaces becoming more important, and the pandemic effect causing demand for inner-city and convenient condo life to diminish. This is likely temporary.
The rapid transit system will become fine-tuned and give Ottawa residents post-pandemic the ability to move around more readily and more conveniently, with less concern about parking issues. As we begin to head into a more normal state of affairs, the attractiveness of convenient, downtown condo living will likely increase in demand in core communities such as Lower Town, Sandy Hill, Centretown and the Golden Triangle.
This is a great time to be in the real estate market to see growth over the long term. I enjoy talking about real estate with those considering entering into the market or altering or expanding their position, whatever that may look like.
If you have any questions, I am always happy to respond.