When the COVID-19 Pandemic started in March of 2020, we had no idea what impact it would have on the real estate market. Now, almost two years later, we’ve seen a drastic shift in housing markets globally.

What has this shift looked like in the Ottawa region?

Housing prices have gone up, inventory levels have gone down, and buyers have changed what their “must-have” lists look like.

Before the pandemic, housing prices in Ottawa and surrounding areas averaged less than $500,000, with condos averaging at $300,000 and had steady annual increase rates in the single digits.

Inventory rates drastically declined throughout the pandemic, with approximately 1100 listed in October 2021. To put that into perspective, the area includes approximately 400,000 residences.

In response to the pandemic, banks lowered mortgage interest rates which helped push housing prices above and beyond what anyone expected.

As bidding wars ignited across all markets, housing prices increased.

The average price of residential properties in the Ottawa area reached $720,000 – a 49% increase compared to 2019.

Another trend created by the pandemic; buyers fleeing to rural areas. With prices rising in the city and many people newly working from home people wanted more space.

With the urge for space came a 63% increase in housing prices in the Ottawa Valley area compared to 2019.

What does this mean?

For homeowners & those looking to sell, this pandemic has drastically increased the value of homes and has created extreme growth in capital gains. Sellers have had and maintained their power in this market since 2020 and will continue to do so as prices rise & inventory levels remain low.

For buyers, especially those looking to enter the housing market, this period of rapid growth has probably left you feeling like you missed your chance. While a lot is working against buyers in this market, some things are to your advantage. We’ve seen historically low mortgage interest rates that have helped buyers in their ability to afford higher-priced homes.
We suggest looking in the condo market for buyers looking to enter the market. While we’ve seen growth in this area, it hasn’t quite matched the growth seen in the freehold market. If you can enter the market now with a condo or townhome, you’ll be able to cash out in a few years with the equity you’ve built.

As always, if you have any questions or need the advice of a professional, contact us! The Adam Mills team is always ready to help you!