Buyers, sellers and investors alike are all wondering what the future has in store for Ottawa. 2023 has left us all feeling uncertain about the near future of real estate, not just in Ottawa but nation-wide. However there is hope on the horizon that the market will level out as buyers return throughout 2024 and 2025.
Here’s a recap of what 2023 brought us:
- In January, the National average sale price declined 18.3% year over year.
- Between March 2022 and July 2023 the prime lending rate in Canada increased from 2.7% to 7.2%.
- Migration from Ontario to Alberta was at an all time high as Ontarians made the decision to flee from the housing affordability disaster in Ontario.
- The anti-flipping tax was introduced and affected properties sold on or after Jan. 1, 2023, targeting everyone from professional home flippers to do-it-yourselfers. Selling a home anywhere in Canada before a year is up now incurs business tax on any profits you make.
- In April, the Government of Canada introduced the First Home Savings Account, a registered plan allowing you, as a prospective first-time home buyer, to save for your first home tax-free (up to certain limits).
- In Q2 2023, the aggregate price of a home in Canada decreased modestly by 0.7% compared to 2022.
- In October, the Canadian Government rolled out an incentive for developers to build rental apartments in an effort to enhance housing affordability. Developers no longer have to pay GST on rental apartment builds.
- As interest rates reached a high, co-ownership became a more popular option for Canadians looking to enter the real estate market.
- In Q3 2023, the median price of a single-family detached home in Ottawa increased 2.3% year over year to $879,000.
- According to BMO, 68% of Canadians are planning to wait to buy real estate until interest rates drop.
Here are just some of the predictions for the 2024 Real Estate Market in Ottawa:
Home Prices Will Climb Again in 2024 & 2025.
In the CMHC’s Spring Housing Market Outlook report it’s expected that home prices will start climbing again in 2024, hitting an average of $694,196 in 2024 and $746,410 in 2025 due to the economy and immigration picking up steam. For Ontario specifically, it’s expected that our supply shortage won’t be coming to an end any time soon. Housing starts in Ontario are expected to take another dip in 2024, offering no relief to our shrinking inventory.
With every prediction, we need to take it with a grain of salt. Price gains are dependent on many economic factors, including the prime lending rate and the overall stability of the economy. For Ottawa in particular, we can expect greater market stability based on historical data than many other regions, however we are not immune to the impact of a recession.
Suburban Sprawl Will Continue in Ottawa in 2024.
We’re seeing it now already, there is a lot of development happening across our city. We’re seeing more and more infill properties popping up in neighbourhoods across the region as developers and investors look to squeeze in more housing.
The revitalization of Downtown Ottawa is also set to continue and attract both new residents and businesses. There will continue to be an influx in developments and mixed-use spaces in our city specifically in areas like Byward Market and Centretown. You will also see emerging neighbourhoods take the lead in home sales as buyers explore a variety of housing options to cater to their various budgets. You’ll see neighbourhoods like Barrhaven and Riverside South grow in popularity due to their diverse housing options.
Kanata will continue to experience growth as it’s been coined “Silicon Valley North”.
Ottawa used to be known as the political hub of Canada as our economy was largely driven by government jobs, however another industry is starting to emerge here. Our newfound reputation as a Tech Hub is attracting professionals from around the world which is generating more interest in residential and commercial real estate, specifically in Kanata. Strategic investors will be keen to purchase in Kanata over the next year.
Should You Invest in Ottawa Real Estate in 2024?
We’re going to sound like a broken record at this point but the truth is that if you have the means and you want to enter the real estate market, there’s no point in waiting. Buyers are going to be flying off the sidelines if and when interest rates fall which will put upward pressure on prices, leaving you to battle it out against everyone else who didn’t want to face high interest rates in 2023.
You can’t time the market, all you can do is make an informed decision that meets your needs and budget requirements. From our perspective, the Ottawa market is stable enough right now to offer returns for those willing and able to hold their investments for the near future. Ottawa is one of the only cities in Ontario that can offer such a variety of housing options that will work with almost any budget. So, if you work with the right Realtor you’ll be able to find the home that suits your family and your budget.
If you’re looking for personalised real estate advice from an experienced Ottawa Realtor, look no further than our team. We are happy to help you on your real estate journey, whatever that may look like.