Not enough houses on the market as well as bidding wars have made decisions fueled by panic to take over the real estate market. Is there a chance that the days of a market with home inspections and offers with conditions could be coming back? Is there a new “normal” for Ottawa real estate in the near future?
April Statistics
April has brought an unusual phase in the Ottawa real estate market. Residential property prices have decreased by nearly 25 percent as opposed to the same month of 2021. This decrease has come in both urban and rural areas with a considerable increase in available listings as well as more moderate price hikes. Fewer bidding wars, as well as some properties failing to receive offers, are also popping up again.
Factors Affecting Pause
Multiple factors are the result of this pause in the market. These include rising interest rates, escalating inflation, as well as the Russian invasion of Ukraine. Despite all these, forecasts show that prices in Ottawa will gain at least 10 percent by the end of 2022 compared to the fourth quarter of the previous year. Is this a realistic expectation given the consistent rising of mortgage rates? Despite the recent point rise by the Bank of Canada, interest rates are still relatively low. Earlier this week, the discounted five-year mortgage rate was 3.49 percent. Compared to the 1.39 percent beginning of 2021, it seems like a substantial raise. However, in the pre-pandemic year of 2019, rates sat at 3.19 percent and were considered inexpensive.
Almost a dozen real estate districts in the Ottawa region reported average transactions over $1 million. Of the 50 districts, none had averages below $600,000. However, the Ottawa Valley still has many properties for less than this price. Big exceptions include Russell, Almonte, and Carleton Place. This suggests that a new normal will not be uniform across all of Ottawa.
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