Demand continues to outpace supply in Ottawa’s real estate market

March 26, 2024 Canuck

Ottawa’s real estate landscape continues to change as more homes hit the market, tempering the massive over-bidding trend of recent years.

Despite this shift, however, property prices are still high, and the market remains highly competitive, leaving many first-time homebuyers struggling to find well-priced properties.

In every neighborhood, signs of spring are popping up, with properties both for sale and sold. Vendula Seary, a renter in Kanata South, says it is increasingly difficult to become a first-time homebuyer.

“We’re currently trying to figure out how much we can afford and what we are able to buy. We both have jobs, it’s a dual income and we would love to stay in this area but I don’t know if that is possible within our budget,” says Seary, whose budget is around the half-million dollar mark. “We are not able to afford anything. The houses that are at a reasonable price, they go really, really fast.”

During the pandemic, the record-low number of properties for sale led to dramatic price spikes and increased competition. For instance, in 2022 a home in Ottawa’s New Edinburgh neighbourhood sold for $3.1M — $800,000 over the asking price. Today, a similar home, only a few doors down the same street, sold for around $2.2 million, slightly under the asking price.

“There has definitely been a shift in the market,” says Dan Salhany, a managing broker with RE/MAX Hallmark Realty Group. “There’s actually a significant pent up demand and we’re seeing it with the traction, with the traffic that’s coming through our open houses, with the inquiries that are coming in and just the number of calls. You may see some opportunities in the suburban markets, but in the urban areas, I think that we’re going to continue to see a higher demand, which is going to ultimately result in prices increasing.”

Salhaney notes there is some stabilization but says that demand continues to outpace supply, adding upward pressure on prices, many of which continue to sell at above-asking prices, despite higher lending rates.

“We’re at a point where I think there’s an acceptability level to where rates are at today. We’re still in in an affordable range, prices have pulled back and I think that if we see another decrease in interest rates, we’re going to see more movement in 2024,” he says. “I think that if people don’t figure out a way to get into the real estate market today, they’re going to struggle even more going into 2025. Prices will continue to rise.”

For Seary, the hope is that the family will be able to make a winning bid on a home in their price range later this season, and break the cycle of paying rent.

“If we decide to keep renting, the cost can be so large we would be stuck paying and there is no money to be saved to potentially buy later,” she says. “We need a bit of luck to get a good home.”

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Canada News

Demand continues to outpace supply in Ottawa’s real estate market

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