2023 Predictions for the Ottawa Real Estate Market
Published on 9 January 2023 in Blog Ottawa Ottawa Real Estate by
Last updated on May 2nd, 2023 at 09:25 amAs we embark on a new year, it’s natural to wonder what the Ottawa real estate market will look like in the coming months. Will prices continue to fluctuate? Will the demand for certain types of homes change? This post will explore the Ottawa real estate market predictions in 2023 and discuss what these trends could mean for you as a buyer or seller.
What Impacts the State of a Real Estate Market?Various factors, including economic conditions, government policies, and demographic and social trends, influence the real estate market. Understanding these variables can predict the future state of the market and help you make informed decisions when buying or selling a home. Here are some of the main factors impacting the current Ottawa market:
- Economic conditions: A strong economy can lead to higher demand for housing, resulting in rising prices. On the other hand, a struggling economy can lead to lower demand and lower costs. Common economic factors impacting the real estate market include interest rates, unemployment, and consumer confidence.
- Demographic trends: For example, a growing population may lead to higher demand for housing and increased prices, while a declining population may result in lower demand and falling prices.
- Social trends: Social trends, like the popularity of specific neighbourhoods, can affect demand and prices. Additionally, changes in how people work and live, such as the increase in remote work, can change the types of properties sought out.
2023 Ottawa Real Estate Market PredictionsAccording to a Re/Max report on the Canadian housing market, average residential prices will decrease across Canada and become balanced in 2023, except in select cities like Ottawa. Ottawa’s average home sale price is projected to increase by 4% in 2023, from $656,761 to $683,000. Currently, the Capital still favours the seller, which these climbing prices reflect. However, by the end of the year, the city’s real estate market is expected to balance, meaning that supply and demand will even out, and prices will stabilize with a sufficient number of options to choose from.
Key TrendsAs discussed above, economic, demographic, and social trends are critical for real estate market conditions. In Ottawa, some key trends that will influence demand and the rise in prices include the following:
- The increased popularity of multigenerational living: Can increase demand (and price) for buying or renting larger homes and preference for neighbourhoods close to amenities suitable for family members of all ages.
- More first-time home buyers are entering the market. This can drive up demand and prices. Additionally, this demographic often prefers more affordable properties or looks for homes that don’t need a lot of renovations.
- Rising interest rates, which decrease affordability, are predicted to cool off late in the year. A cooling of inflation (and interest rates) means that more people may want to buy.
- Short dwelling supply due to halted new construction development resulting from labour shortages, inflated development fees, and material costs: Low supply can lead to price increases because there’s more competition among buyers.
- More demand for townhomes due to better affordability may change the demand landscape for certain types of homes.