According to the new RE/MAX 2021 Condominium Report, condominium sales are firing on all cylinders in the Ottawa real estate market, as strong demand and tight inventory levels characterize current market conditions in the region. The rapid escalation of freehold property values over the past year – up almost 28 per cent – has been a major factor in the increasing number of buyers considering the condominium lifestyle. More than 3,500 condominium apartments and townhomes changed hands between January 1 and August 31 of this year, with sales up almost 29 per cent over the same period in 2020.
Average price has followed in lockstep, rising almost 18 per cent over last year and hovering at $420,000 year-to-date. Centretown remains the most sought-after hot spot, representing approximately 11 per cent of total condo sales in the Ottawa real estate market, yet average price remains relatively stable, rising just two per cent to $462,398 in 2021. Investors and students are behind the push for condominiums, especially those in close proximity to the University of Ottawa and Carlton University. With classes back in session, students have returned to Sandy Hill, Lowertown and the Market Area, and investors are cashing in on the trend. Multiple offers are occurring on two-bedroom flats in key buildings with desirable amenities and lower condominium fees, with most located in Centretown, the Glebe and Westboro. Condominium product in the Glebe is especially popular, with units snapped up quickly. Sales in the area have more than doubled year-over-year, with average price climbing 28 per cent to $779,007. Old Ottawa East, a hidden gem undergoing gentrification, has also attracted a growing number of empty nesters. Although just 24 condominiums have been sold to date, the new Greystone Village development currently underway is expected to breathe new life into the riverfront community.
Empty-nesters and retirees are taking advantage of rapidly escalating freehold values within the Ottawa real estate market, to downsize to condominiums located in walkable neighbourhoods that are close to shops, restaurants and the Rideau Canal. Younger buyers are also considering condominiums as their first step to home ownership.
Condominiums now represent just under 25 per cent of total sales in Ottawa and the surrounding areas. Inventory levels have been slow to improve, which has placed greater upward pressure on condominium values. Several new condominiums that were under construction and expected to bring more units to market have converted to rental units. Luxury condominiums priced over $900,000 are particularly scarce, with demand exceeding supply in that segment of the market. With interest rates expected to remain stable for at least the next six to 12 months, home-buying activity will likely continue at a healthy pace well into 2022.
At the national level, the RE/MAX report analyzed five key Canadian housing markets and more than 100 sub-markets, and found that buyers looked to condominium properties in 2021 as the affordable housing option, in the face of rising freehold values. The West experienced the greatest sales gains, with Greater Vancouver and Calgary condo sales up 87 per cent and 83 per cent respectively between January 1 and August 31 of 2021, compared to the same period in 2020, when a notable downturn in condo sales occurred.
The Greater Toronto Area (GTA) was the leader in condo sales in East Canada, up 71 per cent over the same period in 2020, followed by Halifax-Dartmouth (+36 per cent) and Ottawa (+29 per cent).
In terms of price growth in Canada, the greatest gains occurred in the East, with both Halifax-Dartmouth and Ottawa posting double-digit price gains of 30.0 per cent and 18.0 per cent respectively. More moderate appreciation was reported in Greater Toronto (+seven per cent), Vancouver (+6.7 per cent) and Calgary (+three per cent).
Growth in condo market share across the Canadian real estate market occurred in all regions surveyed but one, according to the RE/MAX Canada 2021 Condominium Report. The greatest concentration of condo sales was reported in Greater Vancouver, where condos represented nearly half (48.2 per cent) of total residential sales in 2021, up from 46 per cent one year ago. Condominium apartments and townhomes in the GTA followed with a 34.5 per cent share of the overall market, up from 30.8 per cent one year earlier. Almost one in four properties sold in Ottawa between January 1 and August 31, 2021 was a condominium, compared to the same period in 2020 (24.3 per cent versus 23.3 per cent). Meanwhile in Halifax-Dartmouth, the condominium segment represented 17.3 per cent of total residential sales, up from 15 per cent one year earlier. While overall sales climbed in Calgary year-over-year, condominium market share declined by just under one per cent in 2021, to 14.2 per cent.