Ottawa Housing Market Outlook 2024

The Ottawa housing market has been experiencing significant growth in recent years, and the outlook for 2024 remains positive. According to the Ottawa Real Estate Board (OREB), the benchmark single-family home in Ottawa increased by...

The Ottawa housing market has been experiencing significant growth in recent years, and the outlook for 2024 remains positive. According to the Ottawa Real Estate Board (OREB), the benchmark single-family home in Ottawa increased by 2.7% year-over-year to $704,900 in December 2023. The benchmark townhouse/multiplex price increased by 4.3% year-over-year to $481,100, while the benchmark condo price rose by 2.1% to $417,200. Overall, the benchmark composite home price increased by 2.7% to $623,900. The average rent for an apartment in Ottawa also saw a substantial increase of 7.5% year-over-year to $2,228.

Ottawa Housing Market Summary

The data from OREB indicates that home prices in Ottawa have been steadily increasing. In December 2023, the average home price in Ottawa reached $623,900, reflecting a 2.7% increase compared to the previous year. This growth has led to a sales-to-new-listings ratio (SNLR) of 108%, indicating a very tight seller's market. Seller hesitancy has contributed to the imbalance between sales and new listings, as sellers wait for higher prices during the spring market.

Verbatim: What local experts from the Ottawa Real Estate Board (OREB) say about Ottawa's regional housing market:

According to the Ottawa Real Estate Board (OREB), the number of homes sold in December 2023 increased by 7.6% compared to December 2022. However, home sales were 16% below the 5-year average and 11.9% below the 10-year average. On a year-to-date basis, home sales in 2023 totaled 11,978 units, a decline of 11.0% from 2022.

OREB President Curtis Fillier states, "Ottawa's resale market closed out the year in a steady, balanced state. This could be an early indication that consumer confidence is returning. We likely won't see the full impact of rate stabilization until the second half of 2024, but December's activity bodes well for a strong year ahead in Ottawa."

Ken Dekker, OREB's past president, adds, "It hasn't been the easiest market, and while we probably won't return to the peak levels seen in 2022, Ottawa's market is poised to recover any ground lost in the past year. Both buyers and sellers need extra patience right now, but solid opportunities are there."

The overall composite benchmark price for homes in Ottawa was $623,900 in December 2023, representing a modest gain of 2.7% from December 2022.

The benchmark price for single-family homes was $704,900, up 2.7% year-over-year, while townhouse/row unit prices increased by 4.2% to $481,100. The benchmark price for apartments rose by 2.1% to $417,200. The average price of homes sold in December 2023 was $632,487, increasing 1.7% from December 2022. The average price for the entire year was $667,794, a decline of 5.5% from 2022.

The number of new listings in December 2023 saw a significant decrease of 12.4% compared to December 2022. There were 523 new residential listings, which was 4% below the 5-year average and 16.1% below the 10-year average for the month of December.

At the end of December 2023, there were 1,844 active residential listings on the market, a gain of 3.0% compared to the end of December 2022. However, active listings were still 55.5% above the 5-year average and 17.2% below the 10-year average for the month of December. The months of inventory numbered 3.3, down from 3.4 months recorded at the end of December 2022.

Month-over-Month Market Expectations for Ottawa

The sales-to-new-listings ratio (SNLR) is an essential factor to consider in the Ottawa housing market. An SNLR under 40% suggests a buyer's market, while an SNLR between 40% and 60% indicates a balanced market. An SNLR over 60% represents a seller's market. In December 2023, Ottawa entered a very tight seller's market with an SNLR of 108%.

Who's Buying Ottawa Real Estate?

In recent years, the primary demographics driving demand in Ottawa's residential property market have been upsizers, foreign investors, professionals who recently immigrated to Canada, and out-of-province migrants advancing their careers. However, the passing of the omnibus Bill C-32 legislation, including the foreign buyers' ban and anti-flipping tax, may shift the Ottawa homebuyers' demographic away from foreign investment. It remains to be seen whether this will have a significant impact, as foreign investors currently make up less than 1.7% of the city's total homeownership, according to Statistics Canada.

Multi-property Investors

According to a report by Teranet, investors and multi-property owners accounted for over 25% of Ontario's homebuyers in 2021 and 1.7% in Ottawa. First-time buyers, historically the largest segment in Ottawa's real estate market, accounted for 26% of buyers until 2016. However, their share has slowly declined, reaching a low of 46.8% in June 2021. Real estate investors and multiple property owners have filled the gap. Multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia. They hold 30% and 40% of the existing housing stock, respectively.

Upsizing Buyers

Upsizing buyers are not driving the demand for single-family homes in Ottawa, which saw the highest year-on-year price increase among all property types. Since February 2018, the price of single-family homes has risen by more than 59.6%, reaching $688,500. Upsizing buyers have also explored secondary markets like Nepean, Gatineau, Gloucester, and Kanata over the last 6 months.

Immigration & Out-of-province Migration

While the pandemic saw many homebuyers leaving urban areas to search for more space and affordable housing, new immigrants continue to fuel the growth of Ottawa's housing market. Although housing affordability remains a challenge for some Ottawans, the federal government plans to bring an additional 2 million new immigrants to Canada, many of whom will choose to settle in Ottawa.

Ottawa Housing Market Caption: Ottawa Housing Market Outlook 2024

First-Time Homebuyers

Purchasing a home in Ottawa as a first-time buyer can be challenging, considering the city's high property tax rates relative to property values. Programs like the First Time Home Buyer Incentive aim to assist homebuyers, but the stress test and elevated interest rates make it harder to qualify. However, despite these obstacles, first-time homebuyers continue to be the largest segment in Ottawa's real estate market.

Final Thoughts

The Ottawa property market is set to remain strong in 2024, with prices expected to continue increasing. While there has been a decrease in average home prices over the past year, it is important to remember that this decline is relative to a period of intense price appreciation during the pandemic.

If you are looking to buy a home in 2024, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to guide you through the home-buying process.

The Canadian rental market experienced a significant surge in 2023, with the average asking rent for all residential properties reaching a historic high of $2,178 in December, a significant 8.6% rise from the previous year. Let's take a closer look at the rental market trends, regional breakdowns, and future outlook.

Rents Rise Across Canada

Over the past two years, there has been a significant surge in rent prices in Canada, with an impressive annualized growth rate of 22%. On average, tenants have experienced an increase of $390 per month. In 2023, rent prices rose by 8.6%, following a 12.1% increase in 2022 and a more modest 4.6% uptick in 2021. Comparatively, the typical annual rent growth rate in Canada averaged 4.9% over the past five years, including a decrease of 5.4% in 2020 due to the impact of the COVID-19 pandemic.

While the average rent in Canada is $2,076, traditional purpose-built rental apartments experienced a significant surge, with an annual growth rate of 12.8%. In contrast, condominium and home rentals saw slower growth rates of 6.9% and 5.9%, respectively.

Rents Rise Across Property Types

In 2023, the cost of renting purpose-built apartments and condominiums surged by 10.7%, mirroring the growth observed in 2022. The average rental price for all types of apartments reached $2,116 by the end of the year. Among different types of apartments, 1-bedroom units witnessed the most significant increase, with a growth rate of 12.7% and an average rental price of $1,932. Studio apartments followed closely behind, with a growth rate of 11.9% and an average rental price of $1,552. The average rental price for 2-bedroom apartments was $2,301, reflecting a 9.8% increase on an annual basis. Lastly, 3-bedroom apartments experienced a 9.9% annual increase, reaching an average rental price of $2,579.

Quebec Rents Surged Even More

In 2023, Quebec stood out as the only province where the growth in apartment rents surpassed that of the previous year, with a rate of 10% compared to 6.9%. The average rent for apartments in December reached $1,953. Montreal experienced an impressive annual rent growth of 11.3%, leading to an average rent of $2,019. Pointe-Claire and Quebec City took the lead as the fastest-growing rental markets for apartments in December, with rent growth rates of 25.6% and 18.9%, respectively. Other cities within Quebec, such as Laval, Saint-Laurent, Côte-Saint-Luc, and Longueuil, also saw significant increases in rental prices for 1-bedroom apartments.

Tight Rental Market in BC, Ontario, and Alberta

British Columbia retained its status as the most expensive province for apartment rentals, with an average asking price of $2,500 in December, despite a 1.4% decrease compared to the previous year. Ontario followed closely behind, with apartment rents averaging just below BC at $2,446, representing a 3.7% annual increase. Alberta experienced the most rapid surge in rents for purpose-built and condominium apartments, with an annual increase of 15.6% in December. Calgary recorded the highest growth in apartment rents among major cities, with a 14% rise compared to the previous year.

Main Factors Driving the Rental Market in 2024

Several factors are expected to impact the Canadian rental market in 2024:

  • Strong demand for rentals, although slightly less intense compared to the previous year, due to a slowdown in the economy, a decrease in the number of non-permanent residents, and an increase in home-buying activity as interest rates decrease.
  • An increase in the number of completed apartments and a rise in tenant turnover, leading to an increase in the supply of rental properties and moderating rent growth.
  • Affordable markets like Alberta are anticipated to experience rent increases higher than the national average.
  • Higher-priced markets in British Columbia and Ontario are expected to see rent hikes lower than the national average.

Looking ahead to 2024, the Canadian rental market is projected to continue facing a shortage, but there is a possibility of achieving a better balance this year. The expected increase in rent is likely to align with its historical 5-year average of approximately 5%. Canada's regional property and rental markets offer promising prospects for homebuyers, renters, and investors alike.

Each $100,000 in mortgage balance costs an average of $575 per month on nesto's lowest fixed 5-year rate and $638 per month on nesto's lowest adjustable 5-year rate. Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization. Each 0.25% change in mortgage rates impacts the monthly payment by $14 on a 25-year amortization.

Rental Prices Compared to Other Canadian Cities

Rental Prices Compared to Other Canadian Cities Caption: Rental Prices Compared to Other Canadian Cities

Rental Prices Compared to Other Provinces and Nationally

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