Overall, residential prices in the first six months of 2021 averaged $734,000 — up nearly 52 per cent compared to same period in 2019.
It happened so quickly there’s been little time to adjust. As recently as May 2019, average residential prices in Ottawa were below $500,000 and had been rising little more than six per cent year over year. Earlier this year, prices peaked at nearly $760,000 after surging 36 per cent.
This advertisement has not loaded yet, but your article continues below.
But the average tells you only so much. In the past two years, Ottawa’s real estate markets have changed profoundly, putting home ownership out of reach in many pockets of the city, while transforming thousands of homeowners into paper millionaires.
Using data provided by the Ottawa Real Estate Board, this newspaper analyzed residential resales that closed during the first six months of this year and compared these to the same period in 2019.
Overall, residential prices this year averaged $734,000 — up nearly 52 per cent compared to the first six months of 2019. That represented an average lottery-like gain of $250,000 for each seller.
Along the way, sales of million-dollar properties became nearly routine. From January to June, 59 real estate areas (out of 275 across Ottawa and environs) saw average resale prices top $1 million. In the same period pre-pandemic, there were just 12 million-dollar enclaves including such well-known neighbourhoods as Rockcliffe Park, the Glebe, Rocky Point and Cedarhill-Orchard Estates.
This advertisement has not loaded yet, but your article continues below.
The epicentre of the new real estate wealth is Manotick, where multi-acre lots and mansions stretch away from the island in just about every direction. No fewer than four real estate areas adjacent to Manotick have in the past two years joined the million-dollar housing club, including most notably Manotick South, where average prices surged 179 per cent to $1.6 million from $567,000 two years ago — reflecting recent, high-end development.
Yet Manotick is merely one of a handful of rural and semi-rural clusters that have seen remarkable rises in popularity. Among the neighbourhoods that have recently joined the millionaires club are: Huntley (northwest of Kanata), Cumberland West, Greely, and the rural area southeast of Stittsville.
This advertisement has not loaded yet, but your article continues below.
“People recognize they don’t need to be close to the downtown core anymore,” says Paul Rushforth, owner of the real estate firm that bears his name. “We’re also seeing lots of people coming in from Toronto, where paying $1 million for a house is not a big deal.”
The initial catalyst for the rise in prices in Ottawa was a lack of inventory as new construction failed to keep up with the increase in the city’s population.
The pandemic added another boost as panicky buyers, aided by historically low interest rates, outbid each other to acquire larger homes on properties that offered space and a respite from crowded downtown streets.
“The leading indicators are all there to support the buying,” says Bill Meyer, a realtor with Tulip Team at Remax Hallmark Realty Group. “There’s job stability and mortgages are cheap. The issue is supply — there aren’t enough listings.”
This advertisement has not loaded yet, but your article continues below.
Who’s buying all these million-dollar properties? Agents say it’s a wide range of people, from tech employees exercising stock options to professional couples who have realized big capital gains on smaller properties and can afford to trade up. There is, apparently, lots of money and borrowing capacity in the capital region.
While prices have jumped fastest in the outlying areas, the gains in a few downtown areas were also notable. In Ottawa East, for instance — the territory south of the Queensway between the Rideau Canal and the Rideau River — average prices jumped 56 per cent from 2019 in the southern part of the rectangle, and in the northern section by nearly 40 per cent. Houses sold in all three Ottawa East real estate areas now average more than $1 million.
This advertisement has not loaded yet, but your article continues below.
The wealthiest neighbourhood remains Rockcliffe Park, where the average resale in the first half of this year topped $3 million — up 33 per cent from the same period in 2019. While that was below the average price growth for the Ottawa area, it nevertheless represented a two-year capital gain of more than three-quarters of a million dollars.
Taking the wealthiest 59 real estate areas as a whole, the average two-year capital gain was nearly $390,000 as prices for each of the 848 residences sold climbed to $1.2 million.
The average price for the other 7,800-plus homes that changed hands during this period was $684,000 — a gain of nearly $237,000.
For sellers, this has been an unexpected boon. For potential first-time homebuyers, it’s the dispiriting reality of Ottawa’s real estate market during the pandemic.
This advertisement has not loaded yet, but your article continues below.
