It’s difficult to think of a better time to own a property in Ottawa than right now. After the third quarter of 2020 drew to a close, several neighbourhoods around the city recorded significant price growth, with jumps of up to 66% from the same time last year.
Several factors, some of which have been amplified by the Covid-19 crisis, have contributed to this rise, and the city is experiencing the strongest selling market in years. But what are these factors exactly? And is it set to continue?
Changing demographics
The first important thing to note is the city’s demographics, and how they affect the market.
Older people tend to criticize them for complaining too much, but one of the things Millennials are correct about is how hard it is to get on the property ladder nowadays. With younger Millennials reaching property-buying age, the pool of demand is increasing as they join their 30-something counterparts still unable to make their first purchase.
A second area to note is the size of the Baby Boomer market, that is those born after the Second World War to the mid-1960s. Increased life expectancy and an explosion in births during that period – hence the ‘boom’ tag – means there are simply more over-60s around today. They often want to downsize after their families fly the nest, hence the high demand for smaller properties like bungalows.
Life expectancy in Ottawa is higher than the provincial average, and, of course, it has its fair share of Millennial buyers – so demand is higher than normal.
Fewer properties up for sale
Selling your property requires a certain leap of faith. You need to be confident that you’ll get a good price for it, but, just as importantly, you want to be sure you’ll find a suitable replacement. While Ottawa sellers can expect the first scenario, they may be put off by the uncertainty of the second.
Throw the Covid-19 crisis into the equation and you have a problem. Ottawa sellers have been spooked by the pandemic, resulting in a huge reduction in properties up for sale, and where there’s scarcity of a product, there’s normally a leap in price.
A local realtor, Bennett Property Shop, conducted a recent survey which found jumps in value of between 40-60% in many neighborhoods around the city. As homeowners seek to hold on to what they have, at least until the pandemic is under control, this could develop into something more than a short-term trend.
Increase in home working
The Covid-19 crisis has triggered a boom in home working, so workers are looking for more space in the home they spend all day in. Studies show that this could be a long-term trend, even after the virus is under control, and this is reflected in the demand for larger living spaces.
Bennett Property Shop’s research found the biggest increases in areas around an hour from the city center. Properties in Plantagenet, a 50- minute drive from Ottawa, saw a jump of almost 60%.
The biggest leap of all, however, was reserved for an area 30 minutes further away. Owners in the Westport district may feel like someone who’s figured out how to beat the slots machines in their local casino, or even drawn the winning lottery numbers, with the average price rising by 66%.
With suburban properties at a premium, buyers will need to commit more cash if they want to land their ideal WFH-friendly house in Ottawa, which means more power to the sellers.
High demand for gardens
Perhaps one positive consequence of the Covid pandemic was a trend towards spending more time in our gardens. The increase in home working mean our property’s green patch was a welcome area of solitude that we might not have appreciated before. Reuters reported a rise in home gardening following the outbreak, and this spurred a demand in properties with outdoor areas.
Ottawa, like most major cities, boasts a commuter belt full of properties with spacious gardens and patios. As mentioned previously, this is helping to fuel the demand for properties outside the city limits, as buyers increasingly seek places to practice their green-fingered skills.
As we stare into an uncertain future, gardens are a calming alternative to stressful cityscapes, offering therapeutical leisure activities as well as something nice to look at when we finish our day of remote working.
Will it last?
While the jump in Ottawa property prices is surprising, it probably won’t last. Trends are temporary by nature and, in the terms of hot seller’s markets, buyers often work out how to find affordable solutions. It might be by snapping up bargains in unfashionable areas or bringing derelict properties back to life.
Also, despite criticism for not doing enough, the Canadian government is steadily increasing its investment in building new homes. If this continues for the foreseeable future, then it should help to take the sting out of a potent seller’s market.
So, buyers: don’t despair. Nothing is forever in the housing market, and the picture often looks completely different in a year or two’s time.