The Past and Future of Ottawa Real Estate

Selling • February 22, 2022

Can you believe that back in the 1980s, you could buy a house in Ottawa for less than $100,000? It’s true. In 1983, the average house cost $86,245.

Prices have been climbing steadily ever since. Only one year later, in 1984, the average cost went up to $102,084. Since then, prices have never dropped, not even during the real estate crash in 2008.

Today, buyers can only dream of such affordable housing prices.

Last year, the market hit an all-time high when the average home value shot up to $719,605. What does the future hold for Ottawa real estate?

No one knows for sure, and expert opinions vary. Some analysts believe prices will continue to soar at an unprecedented rate. Others expect the rapid climb to slow down a little as the market resets in the years following the pandemic.

No one, however, expected prices to decline. However, as a result of recent changes to the interest rate, housing prices have dropped slightly from their pre-pandemic highs. Still, values remain high considering what they were even two years ago, and it is unlikely that the lower prices will last long.

The population continues to grow as Canada accepts more immigrants and as Millenials and Generation Z begin families of their own.

What Do Increasing Prices Mean for Home Buyers?

For a new buyer, you should try to get into the market as soon as possible. It may be tempting to wait until the bubble bursts, but it doesn’t look like that will happen any time soon.

A house you can afford now may become unaffordable if you wait too long.

And even though prices have moderated slightly, demand is still sky high for houses of all types.

More people want to buy a home right now than there are owners who want to sell. Talk to any Ottawa real estate agent, and they will tell you that listings are hard to come by.

When you find a home you like, you may face stiff competition from other buyers. You may even find yourself in the midst of a bidding war.

Trying to buy a house in such a frantic market may feel discouraging, but a good agent will help you develop a solid plan to deal with the competition. For example, they’ll recommend getting a pre-approval from your lending company. Proving to a seller that you can get financing will help make your offer more compelling and may prevent a bidding war against other buyers.

Your agent will help you analyze your current finances and see what you can afford. If you’re a first-time buyer, the government has developed programs to help you compete even in this stiff market.

Think of it this way: The sooner you buy a house, the sooner you begin to build equity as your net worth grows, the more you pay down your mortgage.

Looking for a place near Ottawa where prices are still affordable? Here is some food for thought:

What do these rising prices mean for sellers?

If you sell now, you may make slightly less than you would have in February or March of 2022. However, you still stand to earn a significant profit, especially if you have owned your home for a few years. You can then use the proceeds to relocate, retire, invest or fund the purchase of a new home.

However, selling is the easy part. You still have to find a place to live, and now you’re going back into the market as a buyer. A good strategy will help you navigate the process of selling and then buying.

Want to know more about selling your house during a hot market? Here are some more interesting reads:

What About Investors?

As an investor, timing is always critical.

If you were lucky enough to have bought a house many years ago, you’re sitting on a lot of equity. You can now tap into that equity to purchase an investment property. You might decide to follow your entrepreneurial dreams and invest in commercial real estate.

Or you might consider buying a second home as a rental.

As the real estate market takes off, so does the rental industry. Not everyone wants to buy a home. And unfortunately, in the market, not everyone can afford to. There will always be many people looking to rent as an alternative.

As an investment owner, there are two ways to grow your wealth.

You’ll increase your income by collecting rent from tenants who wish to live in the area.
Your equity will grow substantially as both your primary residence and investment property increase in value.

No matter what your goals are, the real estate market is complex and moves fast. Before taking any action, it’s always wise to consult with a knowledgeable agent who understands your situation. Reach out to us here, and we are happy to answer any questions you have about the way the market is going.