Ottawa housing market to favour sellers in 2021, average price expected to rise 7%
The Ottawa housing market currently favours sellers, thanks to low housing inventory and high demand. These conditions are expected to persist in 2021. Low inventory has been a common trend across many Ontario housing markets, putting upward pressure on prices. Indeed, Ottawa homes saw average price rise to $524,956 in 2020 (Jan. 1-Oct. 31) compared to $441,693 in 2019 (Jan. 1-Dec. 31). Looking ahead to 2021, we expect Ottawa homes to see average prices increase 7% to approximately $561,702 across all property types.
Inventory levels are expected to improve in 2021, causing days on the market to increase as well.
Who’s driving the Ottawa housing market?
Move-up buyers, who are typically families, are expected to propel the Ottawa housing market in 2021. Present-day move-up buyers are encountering difficulty purchasing a home, due to low inventory and frequent bidding wars, which are characteristic of this seller’s market.
Move-up buyers are also the driving force behind the luxury property market, which has seen a massive spike in demand since the start of COVID-19. This trend is expected to continue in 2021.
COVID-19 has significantly changed buyer sentiments and wants, with space being the most important must-have for current buyers. This has been a common trend across many Canadian housing markets as well as regions abroad, with many homebuyers seeking more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.
Ottawa’s most in-demand neighbourhoods based on 2020 sales are Orleans, Barrhaven and Kanata/Stittsville. Unlike pre-COVID buying, buyers are now less concerned with longer commute times in order to find a property that meets their priorities.
Canadian Housing Market in 2021
Canadians are on the move. we aren’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the 2021 Housing Market Outlook Report. We anticipate healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods. This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.
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