Why did the Ottawa real estate market have another record-breaking year? There are three critical factors that made this milestone happen:

The Growth of the Resale Residential Market 

• 2-storey single detached-homes and townhomes and bungalows drove the residential resale market with a 15 percent sales increase compared to 2016. These homes accounted for 83% percent of the residential market.

• Across the city, the average sale price of:
  
  • 2-storey homes – just over $450,000
  • Bungalows – just over $391,000

(Keep in mind that the average sale price of these homes should not be used as an indicator that specific properties have increased or decreased in value, but to provide you with an idea about the price trends of these specific home throughout the city overtime.).

• Most of the residential homes that were bought were sold between $300,000 and $750,000, which accounted for 67 percent of the residential market.

• Most of the residential homes were sold in: 
  • Arnprior
  • Central Ottawa
  • Manotick
  • Orleans
  • Rockland, Casselman and Hawkesbury
  • Stittsville

Increased Residential Demand and Growth in West-End of the City

• The growing recovery of the high-tech sector in Kanata; the expansion of the retail sector and the steady flow of Department of National Defence (DND) employees moving to the new headquarters located at 3500 Carling Ave. in Bells Corners are factors that have to contributed to the growth of home sales and home price increases in the west end. This buyer demand has benefitted homeowners financially who were able to sell their homes in the shortest period of time. 

• This trend is beneficial for investors who currently own rental properties, and for those who are looking for rental property opportunities that can generate long-term positive cash-flow and quality tenants in that particular area of the city, who work for high-tech companies, retail stores and DND.

• In fact, to keep this in perspective, there was 10% sales increase in residential homes purchased in the west end, compared to 2016.     

Strong Condo Market (at the end of 2017)

• Despite weak sales at the beginning of the year, there were record sales from August - December.

• In fact, there was a 22 percent increase in the number of condo units sold in 2017 compared to 2016.

• Most of the condo sales were in the $150,000 to $250,000 and $300,000 to $350,000 price ranges, which both accounted for 75 percent of the condo market. This signalled the importance of home affordability among cost-conscious condo buyers.

• Buyers purchased mostly:   
  • One-level homes – average sale price: $298,537 (up 23.7% from $287,778 in 2016)
  • Bungalows – average sale price: $328,404 (up 9.1% from $300,905 in 2016)
  • 2-storey homes – average sale price: $230,141 (up 19.7% from $223,699 in 2016)
  • 3-storey homes – average sale price: $273,712 (down 2.1% from $279,445 in 2016)

• Buyers bought condos mostly in: 
  • Casselman
  • Central Ottawa    
  • Hawkesbury
  • Kanata
  • Nepean
  • Orleans
  • Rockland
  • Stittsville

In Looking Ahead in 2018 and Beyond

• In the Ottawa market, there will be significant demand for existing resale homes due to Ottawa’s strong economy of increased and stable, well-paid jobs in both the federal public service and the hi-tech sector. Given the increased buyer demand, there is a continual supply shortage of homes for sale in the market. This is caused the new mortgage qualification rules, which forced buyers to enter the market at the end of 2017 before the rules came into effect on January 1. These factors have contributed to the continual increase in home prices, thus making home ownership unaffordable, especially for first-time home buyers.

• The condo market will continue to be in strong demand due to the new mortgage qualification rules where buyers are looking for affordable condo units, especially first-time home buyers and empty-nesters who are looking to do.

• Below is the infographic that summarizes the housing outlook of the Ottawa market in 2018

• For investors, 2018 will provide plenty of potential positive cash-flow rental property opportunities that are located near the newly-built Long-Rail Transit (LRT) stations, which will open in May 2018. The location of these properties will be in demand for tenants who are looking convenience to take the LRT to go to work, school or shopping places.

• In fact, the City of Ottawa 2016 Annual Development Report conducted a study on walkability ratings of each LRT stations, using the walkscore.com. They discovered that five stations — Lyon, Parliament, Rideau, Bayview, and St Laurent — produced a 90+ walkability score. This score indicates that these stations provide transit users with convenient access to important amenities that they demand, such as shops, restaurants and tourist attractions.

A map showing the expected 'walkscore' — a measurement intended to illustrate how easy it is to perform everyday tasks on foot of the Ottawa light rail stations set to open in 2018. (City of Ottawa)

Currently, there are more buyers looking for homes in the Ottawa real estate market than there are homes available for sale. If you or someone you know are thinking about selling a home and ultimately maximizing the opportunity to sell a home for much more money because there are more buyers than sellers, I can help.