After a year that saw home average home prices jump 20 per cent, Ottawa homebuyers can expect little relief in the months ahead, according to a major Canadian real estate brokerage.
“The strong seller’s market is expected to persist through 2021, as demand continues to outpace supply in Ottawa,” Jason Ralph, managing partner at Ottawa’s Royal LePage Team Realty, said in a statement Friday after the company released its latest house price survey.
Last month, Royal LePage predicted the average price tag of an Ottawa home will rise 11.5 per cent this year, fuelled partly by an influx of buyers from the Toronto area looking for better value as well as surging demand for roomier properties in the COVID-19 era.
On Friday, Ralph said prices will continue to climb as potential buyers who failed to close deals in 2020 dive back into the market.
It’s the continuation of a months-long trend in the capital, where prices have been on a steady upward climb as demand continues to outstrip supply.
Prices up 14.9% in Q4
Royal LePage said housing prices in Ottawa rose faster in the fourth quarter of 2020 than in any other major Canadian city. The capital’s aggregate home price increased 14.9 per cent year-over-year from October to the end of December, rising to $568,608. Montreal was next at 12.4 per cent.
But Ottawa remains a bargain compared with Canada’s two most expensive markets. The aggregate price of a home in the Greater Toronto Area was almost $940,000 in the fourth quarter of 2020, while Vancouver’s aggregate price surpassed $1.1 million.
Ralph said the capital region’s relative affordability is a big drawing card for buyers who’ve been priced out of the most expensive markets.
“The city is more affordable than Vancouver or Toronto, and that’s attractive to both first-time buyers and young professionals from across the country, especially those with families,” he said.
Nationally, the aggregate price of a home in Canada increased 9.7 per cent year-over-year to $708,842 in the fourth quarter of 2020, Royal LePage said.
The brokerage said the increase was largely driven by price gains for larger properties. Nearly two-thirds of all regions surveyed showed year-over-year median price gains of more than 10 per cent for two-storey homes.
Overall, home sales across Canada hit an all-time record for December to end what was also a record year, the Canadian Real Estate Association said Friday.
December sales were up 47.2 per cent compared with December 2019, the largest year-over-year gain in monthly sales in 11 years, the association said. Sales for the month were also up 7.2 per cent compared with November.
Six straight months of sales gains
The record-shattering December marked the sixth consecutive month of year-over-year home sales hikes, after the COVID-19 pandemic led to shutdowns across the country in the key March to May home sales season.
“This sweeping strength in sales heavily suggests that what's driving this market are broad overall factors, and not local economic factors,” said Douglas Porter, chief economist at BMO Capital Markets Economic Research, in a client note about CREA's report.
“Specifically, the plunge in interest rates last year and the pandemic-driven move to upgrade have lifted all markets. Suffice it to say, it wasn't at all obvious that this is how things would play out 10 months ago.”
For 2020 as a whole, CREA said some 551,392 homes were sold, up 12.6 per cent from 2019, and a new annual record. In December, the seasonally adjusted annual rate of home sales was 714,516, topping 700,000 for the first time.
– With additional reporting from the Canadian Press