By Rich Danby
If youre looking for excitement as an investor, Ottawa is probably not for you! But if youre looking for slow, steady, and stable growth, Ottawa offers plenty of opportunity. As the fourth-largest city in Canada, Ottawas population has grown by 5% between 2006 and 2016, just slightly ahead of Canadas overall population. In April 2017, Ottawas unemployment rate was 5.3%, compared to the national average of 6.5%.
Over the past five years, Ottawa home prices have experienced slow growth, with an average increase of 1.6% annually; however, Ottawas real estate market has been heating up since the start of 2017 and is becoming a sellers market. Buyers are entering into bidding wars and are willing to pay well above asking price. Buyer confidence has increased as a result of whats been happening in Toronto and Vancouvers real estate markets. The average price of residential properties, including condos, sold in Ottawa in the first four months of 2017, was $386,990, compared to $365,700 during the same time last year, representing a 5.8% overall increase.
Hottest Ottawa neighbourhoods over the past year
Hunt Club, Windsor Park +15%
Billings Bridge, Riverside +14.1%
Elmvale Acres +9.5%
Meadowlands, Crestview +9.2%
Tanglewood, Grenfell Glen, Pineglen +10%
Ottawas $2.1-billion light rail transit project is currently under construction. Stage 1 is projected to be completed and in service by late 2018, and Stage 2 is projected to open in 2023. If youre looking for a deal, there has been a massive oversupply of condominiums since 2012 (however, the average price for a condo is now $270,498, up from $252,341 this time last year). Many developers are now opting to focus on small, purpose-built rental apartments in 10-to-15unit buildings, primarily near LRT sites and major employment centres. Purpose-built rentals have been commanding top rental rates and have been selling quickly upon completion. Adding legal secondary suites to existing bungalows is another increasingly popular strategy to create cash-flowing properties.
As the nations capital, Ottawa has consistent above-average wage employment, and therefore the real estate market is not prone to a boom-bust cycle that other areas experience. This is good news for both investors and for Ottawa residents. Ottawa has the highest-educated workforce in the country and the second-highest average salary per person. In 2015, Ottawa was ranked the third-safest city in Canada, as measured by Statistics Canadas Crime Severity Index. Ottawa was also ranked number one as Canadas Best Place to Live in 2016 by MoneySense.
Ottawa is a proud multicultural city that showcases the rich cultures and traditions of both English and French Canadians. Ottawa offers tremendous value, is a safe place to invest, and offers plenty of upside potential still to come!
Rich Danby is a full-time real estate investor, an accomplished speaker, a real estate coach, and the owner of Rich Ottawa Investments Inc. You can reach him at firstname.lastname@example.org.