Impressive start to 2019 for Ottawa real estate amid tight supply
The start to 2019 for the Ottawa real estate market has been slower than usual, but not for the reasons you might think. Ottawa home sales heading into 2019 have slowed, but only because supply is constrained.
The Ottawa Real Estate Board (OREB) notes last week that agents sold 1,511 homes in March, compared to 1,654 in March 2018, a drop of over 8%. Residential properties saw the largest year-over-year decline at 12%, with Ottawa condos dropping 5%. This is because Ottawa’s hot real estate market doesn’t have enough supply of quality properties—days on market (DOM) has dropped by 14% overall, with the condo segment DOM down 36% from March 2018.
Contributing to the success of the housing market is Ottawa’s high employment. The jobless rate in the Ottawa area remained steady last week at 5.1%, despite adding 2,800 jobs according Statistics Canada. This is a major improvement over 2016 and 2017 where the rate hovered around 6%. The current national jobless rate is 5.8%.
This right supply sits amidst a backdrop of rising prices, with Royal LePage reporting that Ottawa is now Canada’s fourth most expensive housing market. Ottawa recently surpassed Calgary to take the number 4 spot, with an average house price of $469,000, which represents a 7.7% year-over-year increase.
Royal LePage also expects Ottawa to have the biggest gains of any major Canadian city in the second quarter of 219. They are forecasting home price growth of 2.8 per cent—much higher than the projected national increase of 1%. The company cites Ottawa’s tech and government-driven economy, as well as a dwindling supply of rental housing as factors for housing price increases.
Ottawas population is also rising rapidly, with inward migration jumping to 8.8% year-over-year, according to Canadian Real Estate Wealth Magazine. One of the most sought after markets is condos, with the $225,000 — $349,999 price range being particularly in demand and under-supplied.