ADAM STANLEY OTTAWA SPECIAL TO THE GLOBE AND MAIL
Natalie Sauve gets emotional talking about her childhood home. It’s about 20 minutes from Ottawa’s downtown on a cul-de-sac with a pool and a big backyard that backs onto a park, just steps from a school. She had hoped she would raise her own children in the house some day.
But when it was time for Ms. Sauve’s mother, Liliane, to move, they decided to test the market. Immediately, they realized the offers were too good to pass up.
After a coat of paint and some minor repairs, the home went on the market on May 21. Five days later, it sold. There were 61 showings and 18 offers – all over asking. The accepted deal was $92,000 over the list price of $514,900.
“It’s insane,” says Geoff Walker of Re/Max Absolute Walker Realty, the listing agent for the elder Ms. Sauve’s property.
Even as other major markets such as Vancouver and Toronto have begun to bounce back after the pandemic’s devastation, Ottawa has led the pack. Average prices for homes in May, according to the Ottawa Real Estate Board, jumped 11.2 per cent year over year. Condo prices have gone up 15.5 per cent over the same time frame. The year-to-date average sale prices for homes and condos in the city has gone up 13.8 per cent and 17.8 per cent, respectively.
Mr. Walker has worked in Ottawa for 19 years. He says this is the first time he’s seen such a lack of balance in the marketplace, driving places such as Ms. Sauve’s – which, despite her nostalgic connection, is a fairly run-of-the-mill three-bedroom, three-bathroom home, he says – to price points that were previously unheard of.
There is excessive demand in Ottawa, Mr. Walker says, and it’s creating multiple-offer environment. He says he’s seen more homeowners invest money into their own property and stay in their homes instead of trying to buy. Two sellers of his, he says, were on the market and then decided to take their properties off for fear of selling, but then not being able to buy another home.
“Selling is not the issue,” he explains, “finding the correct home [to buy] is.”
According to the Real Estate Investment Network’s COVID-19 special real estate cycle update report, all major real estate markets in British Columbia, Alberta and Ontario are in a steady decline because of the economic impact of the pandemic shutdown, except for one: Ottawa.
Analysts say the resilience of Ottawa’s real estate market has much to do with the makeup of the local economy. Ottawa’s job market is dominated by sectors less affected by the pandemic, including the public service, technology, healthcare and education. Ottawa-Gatineau’s jobless rate increased from less than 5 per cent earlier this year to approximately 7 per cent in May. But even at that, it is still the third-lowest jobless rate of any major metropolitan area in the country, according to Statistics Canada.
Deb Burgoyne, the president of the Ottawa Real Estate Board, was critical of the Canadian Mortgage and Housing Corporation’s recent forecast for Canada’s housing prices, declaring them “pretty bleak.” The CMHC’s broad-based analysis for the country as a whole does not reflect what is transpiring in Ottawa, she says.
“All we can say with confidence is that your house will sell,” Ms. Burgoyne says, pointing to recent figures from the OREB that show more than 90 per cent of all recent sales are going into multiple offers and above list price.
“[CHMC] has got to put it into perspective. Ottawa, for over three years, has been in this feeding frenzy and we had a supply problem before we went into this. We were geared up for a very strong market.”
Mr. Walker says Ottawa’s market is out of sync, in terms of supply and demand.
The long-time agent says the current market is unhealthy, but he’s hopeful for a resurgence of inventory to help balance it out, especially as Ottawa’s economy shows no sign or letting up.
While the numbers show homes in the Ottawa area are costing more, the process to find a home has become a bit easier, according to recent house hunter Matt Harris.
Mr. Harris, a radio producer, and his partner had been casually pondering the idea of buying a home when they found themselves expecting their first child. With a baby on the way, the search was on, and fast.
With a budget of about $600,000, Mr. Harris says they put in an offer on a detached home, about 25 minutes east of Ottawa’s downtown, without stepping foot in it.
“There was always a ‘but’ with the other places we looked at, but we found this place that ticked all the boxes. As much as it’s not the same as going in to view a home and see it, you get a sense on the virtual tours,” says Mr. Harris, who nonetheless insisted on seeing the house in person before signing the deal.
Buying was easy, Mr. Harris says. Moving has been the hard, with the long lineups and restrictions at supply store complicating the process.
“Buying a house “virtually” in Ottawa was easier than shopping for moving supplies,” he says.
“Our house went straight from ‘Coming Soon’ to ‘Sold,’ ” Ms. Sauve says. “It was a little closer to chaos.”