Our nation’s capital isn’t just home to The Hill and the Rideau Canal – Ottawa has quickly become one of Canada’s most in-demand real estate markets, drawing buyers by the thousands for its great housing affordability, stable job market and family-centric communities – not to mention the delicious Beaver Tails.
A Heating Market
Home sales have ballooned 12.6% over the last two years, notes the Ottawa Real Estate Board (OREB), with 13,418 residential class (detached and semi-detached homes) and 4,058 condos for sale in Ottawa (including townhouses) changing hands in 2018. Home values have seen healthy year-over-year gains, up 5.1% to $446,611 and 3.2% to $278,316, respectively.
A shortage of MLS listings in Ottawa has also put upward price pressure on some markets, which OREB says could squeeze some buyers, especially those facing tougher mortgage qualification as the result of the federal stress test.
Most Neighbourhoods Affordable for Median Incomes
Even as home prices rise, however, Ottawa remains firmly within the realm of affordability for most home buyers, according to a study conducted by Zoocasa.com.
To determine the level of affordability in each Ottawa neighbourhood, the study calculated the minimum income required to qualify for a mortgage for the average-priced home in 10 distinct parts of the city, based on all 2018 sold data from OREB. That amount was then compared to $85,981, the actual median income earned throughout the municipality, according to Statistics Canada. For the calculation, it was assumed the buyer qualified for a 30-year mortgage at 3.35%, and made a 20% down payment.
The findings reveal a market brimming with choice for prospective buyers, with home prices well aligned with incomes in nine out of 10 markets across the region. That offers a diverse array of home types and price entry points, from chic condos in Ottawa South to spacious lots and detached homes in Kanata, Nepean, and Orleans.
“Ottawa has world-class amenities, great schools, a healthy tourism industry, and a buzzing retail and restaurant scene,” says Jonathan Amodeo, an Ottawa-based broker with Zoocasa. “In spite of its size and status, Ottawa remains a close-knit, community-oriented and family-friendly city, offering buyers the best of both worlds.”
This, combined with strong employment prospects, has proven to be an attractive draw for buyers migrating from less affordable markets, especially first-timers seeking more bang for their buck – for example, the average-priced detached home in the Greater Toronto Area cost $1,009,535 in 2018, more than double than for the average residential-class property in Ottawa.
“If you have a steady income and access to credit, it’s possible for most first-time buyers to become homeowners in Ottawa, which is in stark contrast to Canada’s largest housing markets” says Amodeo.
The only neighbourhood that cannot be considered affordable for median-income households is trendy Ottawa West Centretown where the average home price of $675,522 remains $6,271 out of budget. However, in every other neighbourhood assessed, a buyer with the median-income could afford the average home with cash left over.
Related Read: These are Hamilton’s Most Affordable Neighbourhoods
Check out how much home a median-income earning buyer could afford in the infographic below:
Ottawa’s 5 Most Affordable Housing Markets
1 – Orleans
Average home price: $370,689 (+4% y-o-y)
Required income: $50,622
Actual income: $85,981
Income surplus: $35,359
2 – Barrhaven
Average home price: $387,052 (+11% y-o-y)
Required income: $52,855
Actual income: $85,981
Income surplus: $33,126
3 – Nepean
Average home price: $407,081 (+9% y-o-y)
Required income: $55,591
Actual income: $85,981
Income surplus: $30,390
4 – Kanata
Average home price: $416,337 (+8% y-o-y)
Required income: $56,855
Actual income: $85,981
Income surplus: $29,126
5 – Ottawa East
Average home price: $435,764 (-2% y-o-y)
Required income: $59,507
Actual income: $85,981
Income surplus: $26,474
Ottawa’s 5 Least Affordable Housing Markets
1 – Ottawa West Centretown
Average home price: $675,552 (+7% y-o-y)
Required income: $92,252
Actual income: $85,981
Income gap: $6,271
2 – Ottawa Central
Average home price: $569,780 (0% y-o-y)
Required income: $77,808
Actual income: $85,981
Income surplus: $8,173
3 – Ottawa West
Average home price: $533,758 (+7% y-o-y)
Required income: $72,889
Actual income: $85,981
Income surplus: $13,092
4 – Stittsville
Average home price: $459,248 (+5% y-o-y)
Required income: $62,714
Actual income: $85,981
Income surplus: $23,267
4 – Ottawa South
Average home price: $441,046 (+4% y-o-y)
Required income: $60,229
Actual income: $85,981
Income surplus: $25,752
