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November 19, 2021 | Canada's Housing Market
Real Estate Investing In Canada’s National Capital Region
As far as Canada’s economy goes, Ottawa is undoubtedly one of the country’s leading powerhouse cities across multiple sectors — real estate included. With residents enjoying a high average income, reliable job security rates, and a growing real estate market, there’s every reason to invest in Ottawa’s local real estate market.
However, as a direct result of the COVID-19 pandemic, Ottawa’s downtown real estate market experienced a momentary blip that resulted in a small downturn. While investing in downtown Ottawa real estate at this time meant taking a much greater risk, those who took a chance on the market blip are now starting to enjoy their rewards.
To learn more about the changes our local Ottawa market has experienced over the past year or so and what we project it will look like in the near future, read through our analysis on the current state of real estate investing in the Ottawa region.
How COVID Affected Our Market
One of the most common COVID-induced real estate trends no matter where in Canada you’re situated was undoubtedly the desire for many residents to leave larger cities in favour of smaller, more suburban and rural communities. This was no different in downtown Ottawa, and about as soon as the pandemic hit, both condos and apartments were viewed as less desirable.
Whether it was homeowners selling their properties to relocate or investors looking elsewhere for their next real estate investment opportunity, Ottawa’s downtown housing market strayed from its historic norms. During the worst of the pandemic, the downtown market diversified into smaller micro-markets and bedroom communities surrounding the city as people fed their desire for more space.
However, together with the recent rollout of vaccinations and new safety regulations tailored to mitigate the effects of COVID-19 in large cities like Ottawa, things are returning (somewhat) back to normality now.
Ottawa’s downtown real estate market has seen a sharp upturn in activity in recent months, and shrewd investors have taken this as a great opportunity to jump in and invest in local real estate at a great price.
Ottawa is among Canada’s highest performing financial, commercial, economic, and cultural metropolises. Find out more about what life is like living in central Ottawa and some of the most desirable suburban and rural surrounding communities through our detailed community guides below.
How Housing Supply Affects Our Market
While Ottawa’s housing markets are starting to make headway in returning to their previous pre-pandemic performance, a return to full investment capacity is somewhat limited by another factor: supply of inventory.
At the moment, there simply aren’t enough properties for sale on the market to foster healthier market growth, which in turn is also affecting the rental market. While Ottawa’s impressive vacancy rate of 3.8% (above the provincial average) means it’s relatively easy for renters to find homes, the average rent rates took a dip throughout the worst of the pandemic and living downtown was deemed less desirable.
For real estate investors, that opened the possibility of actually being in a state of negative cash flow from their downtown income properties. However, that isn’t necessarily always a bad thing. Investors that were confident Ottawa’s downtown real estate market would bounce back hedged their bets on the future appreciation of their capital and real estate investments.
That being said, it’s always advisable for investors to sit down and crunch the numbers before making their real estate investment in order to ensure that they actually stand to make a profit in the long term.
Are you wondering whether investing in an income property in Ottawa is the right move for you? By conducting a thorough analysis of overall purchase costs vs. projected rental income as well as the rental market as a whole, we can help you determine whether investing in an income property is the right idea for you. Simply contact us here to set up a no-obligation consultation.
Investing In Ottawa Real Estate: Still A Good Idea?
While investing in Ottawa’s market does present very real challenges due to the relatively low inventory of homes available, those who are able to purchase properties are doing so at every opportunity.
Those who grow their personal wealth professionally know that when one investment market is drying up, it usually opens the door for more lucrative opportunities elsewhere. So, when the real estate markets aren’t performing as well as they should or there are a few contributing factors as to why they aren’t able to, investors turn to places like the stock market.
However, history has proven that investing in real estate — especially in large cities like Ottawa — is a safe, long-term investment option that reliably appreciates in value. So while real estate investing is somewhat more difficult to do these days, those who are able to get into the market when the cost of entry is still relatively low (and mortgage rates are favourable) are taking every chance they can.
Are you thinking about relocating to Ottawa in the near future? Find out all you need to know about moving here and which neighbourhoods are the most family-friendly via our helpful links below!
Making A Smart Investment In Real Estate
While the low inventory of properties in Ottawa’s real estate market might be frustratingly prohibitive for many buyers and investors to get in, we wouldn’t recommend you jump at just any listing that comes within your reach.
There are some types of properties you should avoid and some that make much smarter long-term investments. For instance, homes with ‘bonus’ spaces like finished garages, spare rooms, and home offices are in high demand due to their adaptability. For those who need to work (or workout) from home, for example, these ‘bonus’ rooms present lots of extra value.
No matter where they are in the world, waterfront real estate presents some of the most lucrative investment opportunities in real estate. Find out more about The Different Types Of Waterfront Properties In Ottawa here.
The most coveted feature of all for real estate investors is undoubtedly having a finished basement. Not only do these contribute to the ‘bonus’ space concept, but basements with the potential to be revamped as an income suite are even more lucrative in the long term.
Whether buyers want to live in the main home above or rent out the house as a whole to separate tenants, safely qualified and registered basement apartments make for amazing vehicles for earning passive income. Just note, however, that all secondary dwelling units must conform with city regulations and zoning laws that deal with things like building and fire codes, for example
With the right guidance and approach, you can find a property in Ottawa that suits all of your needs — whether you’re an investor or just trying to find your next home here. Learn more about how we can help you here: