Ottawa Housing Prices Jump Nearly 15%

May 12

In the first few months of 2023, Ottawa has seen absolutely soaring prices in every type of home.

After a rough second half of 2022 - high interest rates, dropping prices, and buyer uncertainty, it was unclear what 2023 was going to look like.

However, since the start of the year, the market has been heating up, buyers have renewed confidence, and prices seem to be rising. Even better, interest rates were held during the last announcement, meaning there is hope for lower rates in the coming months.

This has clearly been reflected in rising housing prices - and in the past four months, Ottawa has seen a massive increase in sales prices in every type of home on the market!

Price Breakdown:

The largest price increase has been seen in Ottawa Stacked Condos, rising a total of 14.17% from January to April 2023. The average prices raised from $364,082 to $415,682.

Coming in second is Residential Detached homes in Ottawa, rising 12.88% in the past four months. This is an increase from $710,394 in January 2023 to $801,922 in April 2023.

The third largest jump has been in Condo Apartments in Ottawa, rising 7.55% from an average sale price of $412,269 in January 2023 to $443,399 in April.

We also saw price increases of just under 5% in Semi-Detached Residential homes, just under 4% for Residential Row Units, and just under 2% for Condo Row Units.

We spoke with Mitch MacKenzie about what this means for buyers and sellers in the city:

Mitch explains that its typical to see prices climb as January is often one of the lowest sale price months. After Christmas and New Years, people are taking a break from looking for properties as they enjoy the holidays and time off with their family. The cold weather keeps people indoors and less likely to be touring homes. As the weather heats up into the new year, so do buyer’s interests. This is reflected year over year as prices almost always rise through the spring, level out in the summer, and then remain stable or increase a bit during the fall before the winter drop.

Mitch tells us that the window of opportunity to purchase a property at the lowest prices may have closed after two back to back rate freezes announced by the Bank of Canada. This has boosted consumer confidence as unit sales have increased 106% from January to April. Up 42% from January to February, 39% further from February to March, and then a final 25% increase from March to April.

Due to the slower start to this year, Mitch explains that we will most likely have a year similar to 2020, where the market did very well through the summer right into the end of October.

What does this mean for buyers?

Mitch explains that consumer confidence is increasing - which means more buyers are out shopping right now. This means more competition, and Mitch says that multiple offers have been more and more frequent over the past 3-45 days. Buyers should expect to see more of this in the coming months and be ready to prepare more convincing offers or chance losing out on a property.

Further, low supply mixed with higher prices will also mean fewer options for buyers, depending on their pre-approval limits.

Finally, Mitch’s advice for buyers is that if you’re already picky right now, you’re definitely not going to like your options in 3-6 months. It’s important to nail down your wants and needs, and shop in the areas or property styles that give you the highest chances of becoming a homeowner. Work with your agent to make sure you’re seeing homes with the highest potential for success, and be prepared to move quick when you find your dream home.

What does this mean for sellers?

If you’re selling and buying, not much is going to change. Although you may be selling your home for a higher price than usual, you’ll also be buying your next home at a higher price too.

However, if you’re selling to cash out an investment, or downsize in any way, you will want to time the sale with your real estate agent by paying attention to competition and inventory in your neighbourhood. A great marketing strategy will also help you maximize your value and get the best price.