Ottawa's real estate market remains red hot despite COVID-19 pandemic
Average price for condos sits at $383K, while freehold homes is $592K
Ottawa's real estate market remains red hot despite economic uncertainty caused by the COVID-19 pandemic.
A recent report from the Ottawa Real Estate Board said sales of residential properties, including condos, increased by 17 per cent in August compared to the same month the year before, while prices increased between 22 and 24 per cent — to $383,000 and $592,000 — for condos and freehold homes, respectively.
"Ottawa's market right now is hot, hot, hot," said Kim Tran, a sales representative with RE/MAX Hallmark and who runs "Team Tran," a boutique real estate group in Ottawa.
"It is a seller's market. They're doing very well. A lot of people are capitalizing on the situation right now and putting their house on the market."
She witnessed an Orléans home sell for $250,000 over asking last month. She said part of the reason for high prices are relatively low asking prices in the suburbs.
"The housing price to start with is very conservative. It's not that high. So right now, it's really just catching up and a lot of people find there's more value out there."
Ottawa economy looks stable
"Ottawa is a very different city compared to the rest of the country. We're living in a government town so a lot of our jobs are quite stable compared to a lot of other cities," she said.
But the scorching market is also making it difficult for buyers.
"A lot of times they have to compete in bidding wars or multiple offers and a lot of times they have to go in with very few or no conditions," said Eric Ritterrath, a real estate broker with Royal Lepage Team Realty.
The federal government as a main employer and low interest rates — giving people more buying power — are also driving the market
"When you have economic stability, it gives confidence to buyers... they can afford to overbid," he said.
Stressful for first-time buyers
Keerthi Rajan, 31, is one such first-time buyer who didn't expect the competition he'd faced finding a home, despite moving from Toronto earlier this year.
"It was quite challenging to find a house that you really like," he said.
He and his wife started seriously searching for a house in June and put offers on seven to eight homes, but were always out bid.
"It was really stressful," he said.
The couple finally secured a home in Bells Corners in August and are set to move in next month. He said the housing market in Ottawa is more affordable than in Toronto, but he sees some familiar trends.
"I'm feeling that it's slowly turning into a Toronto market."
CMHC braces for COVID-19 impacts
Despite Ottawa's seeming stability, the Canada Mortgage and Housing Corp. (CMHC) expects markets across Canada could be negatively affected, as the true cost and economic shock of the COVID-19 pandemic are realized.
"While it will take several months for the economic impacts of COVID-19 to fully materialize, some factors are starting to work their way into in our financial results — for example, we are starting to see the impacts in our provisions for insurance claims," said Lisa Williams, CMHC's chief financial officer, in a statement on the corporation's second-quarter financial results last month.
The housing market will have to reckon with significant short-term uncertainty, as well as falling housing demand from weaker household incomes in the medium term, the Crown corporation said.
with files from The Canadian Press