It’s been a difficult two years for Ottawa’s housing market, but we’re finally starting to see a shift — and one that is positioning the market for a healthier 2025. Both resale and new-home sales are rebounding, government intervention is having an effect, and the industry itself has made several efforts to meet buyers where they are at.
Does this mean affordability will no longer be the elephant in the room? Certainly not. But it is getting easier for buyers who have been sitting on the fence, waiting for conditions to improve to jump off and get into the market.
Both the resale and new-home markets have seen an increase in sales in the most recent quarter, according to industry analyst PMA Brethour Realty Group. PMA’s Q3 Ottawa Housing Market Overview, covering July-September, shows combined sales were 4,189 this year, up 14 per cent from the 3,608 sold in the same period last year. That’s still off the five-year average of 5,154 but it is an improvement.
Average home prices, meanwhile, while still much higher than they were pre-pandemic, have returned to the single-digit percentage increases that were the norm before the market went haywire in 2019, which provides more stability for buyers.
Not surprisingly, townhomes remain the most popular choice for new-home buyers, representing 52 per cent of sales in the third quarter, with another 12 per cent of sales coming from condo townhomes. Single-family homes, meanwhile — still the gold standard for a majority of homeowners in Canada, according to a survey this fall by online real estate platform Wahi — made up just 31 per cent of new-home sales.
Interestingly, it’s the reverse for the resale market, where 54 per cent of sales in the third quarter were singles (averaging $818,852) and 32 per cent were townhomes (averaging $546,989).
The demand for townhomes in the new-build market “is primarily driven by affordability,” says PMA Ottawa’s president, Cheryl Rice. “As of early November 2024, new townhome prices are on average $653,441, as compared to an average of $992,382 for singles.”
Buyers looking for even more affordable options have turned to condo townhomes, often priced under $500,000 with some under $400,000, she notes.
“Reaching these price points has been a collaborative effort by Ottawa builders, leading to an average seven per cent year-over-year price decrease for townhomes and an even sharper 19 per cent decrease for condo townhomes,” she says. In contrast, single-family homes have seen a much smaller reduction of just two per cent.
“This significant price reduction has widened the gap between the average prices of single-family homes and townhomes. While the difference between the two was just $181,000 at the end of 2018, it has expanded to $338,942 in 2024.”
Caivan is one of several builders that have been offering either stacked towns or three-storey, back-to-back towns as a more affordable option for first-time buyers.
In early November, Caivan introduced a new type of stacked townhome called its Summit Series at an unheard-of price of $349,000. What’s unique about these towns is that rather than having units that are back-to-back with another unit, which is typically what we see in Ottawa in a stacked town, they run the full length of the building, offering windows at both the front and rear.
Caivan ran an awareness campaign about the new homes a few weeks before launch that attracted a whopping 3,000-plus registrations, or expressions of interest. And within a week of releasing, buyers scooped up all 172 homes available. Caivan is currently sold out of the Summit Series until the next release, which has not yet been determined.
“It really is an opportunity for those who are renting to purchase something that is brand new to the market in Ottawa and designed specifically for what families are looking for,” says Jonathan Wiseman, Caivan’s executive vice-president of sales and marketing.
MORE: Learn about the Summit Series
Minto Communities also saw success with its launch in September of Weavers Way in Almonte, with initial buyers particularly interested in taking advantage of getting more bang for their buck by heading outside the city.
“I’ve been looking for years … I’ve been waiting for affordable housing,” noted one buyer, who had camped out for two nights to be the second in line to get the townhome she wanted when sales began.
An earlier affordability update shared other ways builders are working to meet buyers where they are at, including homes with less bells and whistles, smaller floor plans and incentives like design centre credits.
Combined with decreasing interest rates (the Bank of Canada has dropped its benchmark lending rate, which affects mortgage rates, more than a full percentage point since June) and government efforts to address the affordability issue — allowing 30-year mortgages for first-time buyers and those buying new builds, as well as raising the cap on the amount a buyer can qualify for an insured mortgage — the local housing market is seeing more activity.
This year “is proving to be a turnaround year for Ottawa new-home sales,” says Rice. While it remains to be seen how much the market — both new-home and resale — will turn around for 2025, there is optimism. Anecdotally, builders anticipate a climb to more typical sales numbers by next spring (barring a federal election, which would create uncertainty) and TD Economics in its Canadian Housing Outlook expects federal measures to stimulate housing markets in Ontario.
But despite that, affordability remains an issue for many.
At a presentation in October to members of the Greater Ottawa Home Builders’ Association (GOHBA), Ian Lee, who is an associate professor at Carleton University’s Sprott School of Business, noted that in 2002, the average cost to own a home as a percentage of annual income was about 35 per cent. Today it’s at more than 60 per cent.
“We’ve got a huge problem in the real estate market,” he says. While he is still researching the subject, he puts much of the blame for price increases on municipal approval delays in Ottawa and other big cities, although his data notes Ottawa is improving. Still, “if you delay anything it’s going to become more expensive,” he says.
GOHBA’s executive director, Jason Burggraaf, has also been hammering away at development charges (or DCs), which have seen several increases in the past year.
“Periodic changes obscure the true increase in DCs from Oct. 1, 2023, to Oct. 30, 2024,” he says in an Oct. 21 post on X (formerly Twitter). “For singles, semis, towns and apartments: 27 per cent inside the greenbelt; 22 per cent outside the greenbelt … and two more increases in spring 2025.”
For context, that means development charges on a townhome in the suburbs have jumped to $49,591 as of Nov. 27 from $40,296 a year ago, which was itself a large sum.
“Affordability is definitely still a challenge, not just in Ottawa, but across the province and across the country,” says Wiseman. “And I don’t see it being an issue that is fully resolved anytime soon.”