Why is Ottawa Real Estate a Seller’s Market?
Dan explains some of the reason why Ottawa Real Estate is a Seller’s Market in February 2020 — your 1 minute 41 second explanation:
The above video is a portion of a much longer video I recorded while practicing to go Rogers Daytime with Dylan Black. See bottom of posts for the actual interview.
A common thing I hear from clients, friends and the occasional colleague is that they think that it’s money coming from other areas of Canada or globally that is driving up the real estate prices in Ottawa. I listen to their commentary and don’t necessarily disagree, but I would add that non-Ottawa buyers can’t be the only thing driving up the prices.
I also tell them that Ottawa pricing is considered low for a mid-size city and that with the interest rates expected to stay historically low for the foreseeable future. I would add that there seems to be a bit of “hysteria” in the market as well, but that’s what happens when people can’t find home in which to live.
On February 21, the Ottawa Citizen published a story about a study released by Ryerson’s Centre for Urban Research and Land Development, which shows that Ottawa gained the most new millennials of any region of Canada (July 1/18 –> June 30/19). Here’s a direct link to the story:
Seems like the millennials care about quality of life — Ottawa offers that in spades! I grew up in the Ottawa area, and deep down I always knew if was a pretty good place to live, but it wasn’t until I lived abroad (working for BNR/Nortel) in the ’90’s that I really got to appreciate the subtleties of life in a beautiful city.
Condos were a “hard-sell” just a few years ago. In 2016 and 2017 many condos were worth (and selling for) less than they had sold for in 2010-2013. There were too many condos built. There were lots of investors that had bought multiple units pre-construction in new buildings and couldn’t sell them after closing. Condos became the new rental unit. Several new buildings were cancelled or postponed — and now we don’t have enough to fulfill the demand. It’s a bit of a roller-coaster. Be sure to talk to an experienced realtor (like me ;^) to help you buy even pre-construction condominiums.
Interest Rates are _LOW_
We have had about 20 years now of historically very low interest rates. Yes, there have been times when rates were crazy high (early ’80’s), but there has not been even a hint of heading back to the historically average range of 7 or 8% on fixed rate 5 year mortgages. Previously the federal government had implemented rules to ensure people didn’t get in too deep — they have recently loosened those rules slightly. That info is for another post though. Suffice to say, money is cheap, so sale prices increase as people buy.
Hiring and new Canadians/Ottawans
Government, high tech and other jobs in Ottawa are increasing, so people are moving here. People are moving to Ottawa from all around Canada and all around the world. They are often well educated and coming for good paying employment. They want the quality of life Ottawa can offer and consider the cost of entry to the Ottawa Real Estate market very attractive compared to Canada’s big cities and most other countries.
I’m here to educate, inform and guide you through the buying and real estate investment process. There can be many non-trivial subtleties to consider — your highest return on investment will depend on working with the right realtor.
Let me know if you have any questions.
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Dan Moloughney, Broker of Record
Ottawa Urban Realty Inc.
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