Ottawa Real Estate Market Report for August 2020
Another busy month for the Ottawa Real Estate Market. Both condos and freeholds sold twice as fast in August this year as they did last year. (The infographic shows the year-over-year speed to sell. Sales of freehold homes slowed significantly due to the pandemic this year.) And these numbers aren’t reflecting the actual speed because most properties have been specifying “no offers until”, which is typically a week, to allow many people to view the home. And then they sell on the day that offers are accepted.
So, time-to-sell is still speeding up for real estate in Ottawa.
And look at the changes in average prices! Condo prices up 17% year-over-year! Freehold up 14%! And the month-over-month averages show even more significant increases: 25% and 20%!
The super-low mortgage rates certainly account for much of this buying activity. Ottawa has also had a pent-up demand for homes that was increased by the slow-down during the pandemic. And we’re seeing many people moving to Ottawa from other more expensive areas such as Toronto.
There has been an interesting side effect of the shift to working-from-home due to the pandemic. Sales in towns near the city have significantly increased. And prices have risen dramatically as well. This is particularly interesting because mortgage lenders prefer to lend on properties that are easy to sell quickly. And the smaller the town, the longer homes would take to sell. Plus, these homes would usually appreciate more slowly than homes in the city.
But we have seen “bidding wars” this past year on even rural properties, such as small “hobby” farms. This is unusual because it is typically more challenging to arrange mortgages on them.
There is always an ebb-and-flow to the real estate market, so this seller’s market will end at some point. Perhaps it’s even starting now: clients of ours recently purchased a condo for less than the asking price.
Buyers are still finding homes, both resale and new build. Unfortunately, much of the new construction has been delayed by COVID-19, which means fewer new homes available in the short term.
The low mortgage rates are a boon to buyers and an important offset to the prices of homes. I am not a fan of the meddling that the government – and CMHC – has been doing with mortgage rates. They tend to be overly heavy-handed. Some of them aim to calming Vancouver and Toronto area prices, which then comes down like a ton of bricks on Ottawa, and, for example, on first-time buyers and investors.
It is important to consider potential increases to the mortgage rate you arrange. It’s also important to review your goals: how important is your house to you? Will you spend most of your time there and entertaining there? Or do you want to have money for travel, for investing, for self-improvement like school? Discussing all of this with a knowledgeable mortgage broker can make all the difference.
The same review of your finances is worthwhile late in life as well. Are you getting close to retirement? Perhaps empty-nesters? Perhaps the large home and yard are not as important as they were. So perhaps it’s worth thinking of selling and moving to a smaller home or possibly renting. (If you are thinking of something like that, we strongly recommend looking for a new home first before selling!)
Ottawa Real Estate Market charts
Here are some charts for the past 5 years that are related to this Market Report. The seasonal peaks and valleys are clear, as well as the continued increases in average monthly prices and the decreasing Days on Market (time to sell). As usual, the number of sales in this type of hot market is constrained by the number of available properties. So it likely doesn’t reflect home many sales there would have been.
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