Is Ottawa market crazy right now?

Question

I was renting a room close to Elmvale shopping mall in ottawa and the owner had purchased a 3+2 bedroom 1+1 bath detached house for around 400K in spring of 2018.

The house which is right next to it is sold for 565K in the spring of 2019.

I was wondering if it is some kind of a bubble?

Stephen Fryer · Answer

HI Account Closed

Ottawa's economy is anchored by the federal government and high tech. Of course there are also all the service industries that feed those drivers. Last year, the National Capital Region added about 50K new jobs. Almost 30K of those were in professional services including finance, insurance & real estate. All those new people need a place to live, which is driving up the cost of housing.

Chris Habets · Answer

It's ridiculous. Way more buyers than sellers. Almost all retail buyers if that helps - a lot of the multi family units are still slow to sell. At least from what I've seen, which is limited to glancing at realtor.ca (often).

A bubble? Eh. We're a strong market here in Ottawa. Well anchored by the government. There will be a bit of a correction - I know of a few people waiting until the spring to sell, and if I know a few I'm guessing there are a lot. So my guess is there is a bit of a correction but only a few percent.

Account Closed · Answer

@Judy C.

What exactly is the local economy in Ottawa?

Sam Raj · Answer

@Kevin McGuire

Thanks Kevin for your inputs, this helps!

Kevin McGuire · Answer

@Sam Raj We tend not to see bubbles in Ottawa. Bubbles are the result of speculation and that money tends go to Toronto or Vancouver. I like Ottawa for the sustainable economics (as others here have described) and the resulting “steady Eddie” housing market. So no, I don’t think it’s a bubble because I don’t see unusual economic forces artificially jacking up prices. Is it a spike and will prices go down? No idea. I suspect though that it’s seeing some additional investment as a secondary market to a saturated Toronto market.

Sam Raj · Answer

@Stephen Fryer

Thanks Strphen,

That makes total sense.

Sam Raj · Answer

@Kris H. @Judy C.

Thanks for your comments, I’m new to REI, and would love to know more about your experience and investment strategies.

Judy C. · Answer

Hi,

According to some stats I read, certain neighbourhoods went up by over 20%, and Alta Vista / elmvale area was actually one of the lower appreciating areas in Ottawa.

while 20% is not sustainable, our local economy is strong and housing remains one of the most affordable amongst major cities in Canada. I think we won't see any slow down until at least a few years out. As a millennial, I'd say about 30% of my friends have been actively looking for a home and all are hoping for more supply in the spring.

Is Ottawa market crazy right now?

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