Another major Canadian real estate brokerage is predicting that Ottawa’s booming home resale market will continue to sizzle in 2021, thanks to the region’s stable government- and tech-driven economy, an influx of buyers from the GTA looking for better value and surging demand for roomier properties in the COVID-19 era.
Royal LePage said Monday it’s forecasting the aggregate price of a home in the capital to rise to $624,000 next year – a jump of 11.5 per cent and well ahead of the overall average increase of 5.5 per cent across all major Canadian markets.
The brokerage says the median price of a two-storey detached house in Ottawa is expected to jump 12 per cent to $656,300 in the next 12 months, while its forecast calls for the median condo price to rise 7.5 per cent to $417,900.
“Ottawa real estate continues to see high demand from Toronto buyers who are looking for less density and more outdoor spaces,” Jason Ralph, managing partner at Royal LePage Team Realty, said in a statement.
“Living in Ottawa gives you access to great schools and health care, a good job market and you can maintain a city lifestyle while affording a much larger home than what is offered in the GTA. Many local buyers struggled to find what they were looking for in 2020 due to low inventory. With their return to the market in the spring coupled with continued demand from the GTA, prices are forecast to rise significantly.”
Low interest rates
Demand for housing is expected to continue to outpace supply for the foreseeable future, Ralph added, noting the single-family market is “especially competitive” in Ottawa.
“We do not see inventory relief coming in the spring, which is expected to result in multiple offers and further price increases,” he said.
Low interest rates are enticing a flood of new prospective homeowners who are driving up prices in virtually all major markets, Royal LePage CEO Phil Soper said in a news release.
“Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand,” he said.
“With policy makers all but promising record low, industry supportive interest rates to continue, we do not see this imbalance improving in the new year.”
Echoing other industry experts, Soper noted that this year saw a “clear shift” towards larger properties and single-family dwellings outside the urban core “as families repurposed homes to become their office, school classroom, gymnasium and restaurant during the pandemic.”
He expects that trend to continue ahead as Canadians hunker down at home while they await a vaccine. But he also pointed to “broad-based demographic trends” that are fuelling the single-family market, including empty-nesters who are moving to quieter neighbourhoods and millennials who are starting families and need more space.
“Corporate Canada's pandemic-driven move to work-from-home operations has simply accelerated relocation patterns already under way,” Soper said.
Royal LePage is the second major Canadian real estate brokerage to weigh in with its 2021 Canadian forecast this month.
Re/Max wasn’t quite as bullish on the Ottawa market, however. It expects inventory levels to start creeping up in 2021 and is forecasting the average Ottawa home price to rise by a less robust seven per cent.