Ottawa Real Estate Market Update: A Slow Start to 2025, but Is a Busy Spring Ahead?

Feb 5

As we enter 2025, Ottawa’s real estate market continues to evolve, shaped by seasonal trends, market conditions, and broader economic factors. The year began with a slower pace, largely due to the New Year falling mid-week. This timing led many buyers and sellers to extend their holiday breaks, delaying real estate decisions until they settled back into their routines. However, as January progressed, market activity picked up, setting the stage for what could be a busy spring.

Despite ongoing political and economic uncertainties, confidence in Ottawa’s real estate market remains strong. Expanded lending options from financial institutions are increasing affordability, particularly for first-time homebuyers who have historically faced challenges entering the market. Competitive mortgage rates and diverse financing options have made homeownership more accessible, creating positive momentum across different segments of the market.

Residential Market Overview
The residential sector, encompassing a wide range of property types, experienced a slight dip in sales activity, with 617 homes sold—a 4.2% decrease compared to January 2024. While this may initially appear concerning, it's essential to view it within the broader context of increased inventory and evolving buyer behaviours.

Units Sold: The 4.2% decline reflects a modest adjustment rather than a downturn, influenced partly by the slower post-holiday re-engagement.
New Listings: There was a 3% increase in new listings, a positive sign indicating growing seller confidence. More listings mean buyers have more options, contributing to a healthier, more balanced market environment.
Months of Inventory: Sitting at 5.4 months, this figure suggests a balanced market where neither buyers nor sellers hold a distinct advantage. It's a shift from previous years, where inventory constraints often led to highly competitive conditions. However, will we continue to sit in a more balanced environment or start to shift back toward a seller's market? Only time will tell, and months of inventory is a key statistic to watch. Typically, anything below 4 months of inventory indicates a seller's market, 4-6 months reflects a balanced market, and 6+ months suggests a buyer's market.
Average Price: The average price rose by 5.8% to $670,258 compared to last year,

Single-Family Homes
Single-family homes remain a cornerstone of Ottawa's housing market, reflecting the preferences of families and individuals seeking space and privacy.

Units Sold: Sales totalled 306, marking a 3.8% decrease year-over-year. This slight drop is consistent with seasonal trends and broader economic shifts.
New Listings: There were 640 new listings, a decrease of 6.2% compared to the previous year. This decline may reflect some sellers adopting a 'wait and see' approach, anticipating more favourable conditions in the spring.
Average Sold Price: The average price increased by 8.4% to $821,202, highlighting strong demand and the enduring appeal of single-family homes, particularly in established neighbourhoods.
Months of Inventory: Inventory levels rose to 5.6 months, suggesting a more balanced market where buyers can take more time to make decisions, reducing the pressure often seen in competitive environments. However, it's important to consider that while this reflects the broader market trend, conditions can vary significantly depending on the specific home and neighbourhood. Certain price ranges and areas continue to experience high demand, creating competitive scenarios despite what overall statistics may suggest.

Townhomes
Townhomes continue to attract buyers looking for a blend of affordability and space, appealing to young families, professionals, and downsizers alike.

Units Sold: 192 townhomes were sold, representing a slight decrease of 3% from last year. This figure aligns with the overall residential trend of a slow start to the year.
New Listings: New listings came in at 329, down 1.2% year-over-year. This stability suggests consistent interest from both buyers and sellers in this segment.
Average Sold Price: Prices remained steady, with the average at $555,873, marking a modest 0.9% increase. This indicates that townhomes continue to offer strong value propositions for budget-conscious buyers.
Months of Inventory: With 3.5 months of inventory, the townhome market remains relatively balanced (slightly more towards a sellers market), offering opportunities for both buyers and sellers. While prices haven’t seen a significant jump, the months of inventory for townhomes continue to sit lower than for condos and single-family homes. As buyer affordability improved last year with the easing of interest rates, the townhome market has gained traction. Given that anything below 4 months of inventory is typically considered a seller's market, I think we are going to continue seeing months of inventory stay low, with prices likely starting to rise. If you’re active in this market, now may be a good time to seriously consider your options.

Condos
The condo sector reflects the evolving urban landscape of Ottawa, catering to a diverse demographic that includes first-time buyers, investors, and downsizers.

Units Sold: Sales declined by 5.2%, with 109 units sold compared to the same period last year. This reduction may be attributed to the surge in active listings, providing buyers with more options and extending decision-making timelines.
New Listings: There was a notable 22.3% increase in new apartment listings, which could be attributed to investors selling off properties ahead of upcoming changes to capital gains. Additionally, as more people are required to return downtown for work, we might see increased buyer activity in the condo market. This will be an interesting segment to keep an eye on.
Average Sold Price: The average price rose by 5.4% to $441,704, demonstrating resilience and sustained demand, particularly for well-located & maintained properties.
Months of Inventory: The inventory level jumped to 7.3 months, offering buyers greater flexibility and negotiation power in this segment.

Key Takeaways

Inventory levels are higher across all property types, creating a more balanced market dynamic that benefits both buyers and sellers - but will this last or is this just due to a slower start to the year?
Price growth remains consistent, especially in the single-family and condo segments.
The market is transitioning from the highly competitive conditions of previous years to a more measured environment, providing opportunities for thoughtful, strategic transactions.

Looking ahead, all signs point to an active spring market, driven by improved affordability, diverse financing options, and sustained buyer interest. Whether you're considering buying, selling, or simply staying informed, understanding these trends is crucial. Feel free to reach out—I’d be happy to discuss how these developments might impact your real estate goals and help you navigate the market with confidence.