February Ottowa Real Estate Recap: Elections, Tariffs & Cuts, Oh My!

 

Well, here we are—January 2025 is officially in the books, and it’s been a chaotic start to the year. We’ve seen a Prime Minister step down (sort of), the beginnings of a potential trade war with the U.S. (maybe), and yet another interest rate cut by the Bank of Canada. With everything happening, it wouldn’t be too surprising if, by the time you read this, we’ve also been invaded by aliens.

 

But for now, let’s focus on something a little closer to home: Ottawa’s real estate market. It may not be the headline news for everyone, but it’s certainly a topic I’ve been getting a lot of questions about lately. While I can’t predict the future with certainty, I do have some insights and, of course, the latest market stats to help paint a clearer picture.

 

So, let’s dive in!

 

January 2025 Freehold Market Stats

Before we discuss the broader economic factors at play, let’s take a look at Ottawa’s freehold real estate market for January.

 

 

In January 2025, a total of 408 freehold properties were sold in Ottawa. While this number is on the lower side, it’s not entirely out of the ordinary. In fact, it’s the second-lowest January total in the past seven years, with the lowest being 364 sales in January 2023. However, a typical January usually falls within the range of low 400s to low 500s, so we’re still within a historically normal range.

 

For additional context:

 

• January sales were 1.9% lower than December 2024 (which saw 416 sales).
• They were 3.5% lower than January 2024 (423 sales).

Despite this slight decline, these differences aren’t overly significant.

 

 

Inventory levels remained stable at 3.3 months of supply, meaning the supply and demand for freehold properties were balanced. However, in a broader sense, this number is still relatively low. A balanced market typically has between 4 to 6 months of inventory, and anything below 4 months leans towards a seller’s market.

 

Interestingly, our Sales-to-New-Listings Ratio came in at 50%, and the average time to sell was 52 days—both of which align with a balanced market. However, seasonality can sometimes distort these indicators.

 

 

One of the most noteworthy stats? The average sale price for freehold properties in January was $773,000:

 

• 2.9% higher than December 2024
• 6.5% higher than January 2024 ($726,000)

 

In fact, this was the second-highest January average price ever recorded in Ottawa, and it ranked as the 9th highest average price for any month in history. Seeing such strong pricing momentum in January is an encouraging sign for sellers.

 

If this trend continues, we may see further price growth as the year progresses. Buyers should be prepared to act quickly and ensure their finances are in order to remain competitive in this market.

 

Now, let’s shift gears to Ottawa’s condo market.

 

 

January saw 174 condo sales in Ottawa:

 

• 7 more sales than December 2024
• 16 more sales than January 2024

 

While these numbers indicate some improvement, they still place condo sales at the lower end of historical January trends (which typically range from 150 to high 200s).

The average condo sale price in January was $439,000, representing:

 

• 2.9% increase from December 2024
• 5.1% increase from January 2024

 

While these figures mark a strong start to the year, condo prices have largely remained flat for over two and a half years, fluctuating within the $410,000 to $455,000 range.

 

 

Condo inventory levels also remained stable at 3.7 months of supply, placing the market slightly on the seller’s market side of balanced conditions.However, the Sales-to-New-Listings Ratio came in at 41.1%, which is on the very low end of a balanced market (anything below 40% would indicate a buyer’s market). This discrepancy suggests that seasonal factors may be at play.

 

 

Overall, I’d classify the freehold market as a soft seller’s market, while the condo market remains balanced. Generally, condo trends follow freehold trends, so if freehold prices continue to rise, condos may see a delayed boost in pricing as well.

 

 

On January 29th, the Bank of Canada cut its key interest rate by 0.25%—the sixth consecutive cut, bringing the overnight rate down to 3%.

 

For those with fixed-rate mortgages, this change won’t impact payments. However, for those with variable-rate mortgages, this reduction equates to about $13 per month in savings per $100,000 of mortgage.

 

More importantly, variable mortgage rates are now comparable to fixed rates, which means future cuts may increase buyers’ purchasing power, potentially leading to more transactions and price growth.

 

 

With a federal election on the horizon, many are concerned about potential cuts to the public service—Ottawa’s largest employer. While a Conservative government is widely expected, the extent of any layoffs remains uncertain.

 

Having experienced the 2012 Deficit Reduction Action Plan (DRAP) firsthand, I can say that a large portion of those cuts came from early retirements, hiring freezes, and voluntary severance packages rather than widespread layoffs. During that period, Ottawa’s real estate market still saw a 1% price increase, suggesting the impact may not be as severe as some fear.

 

 

The recent Canada-U.S. tariff dispute has caused widespread concern, but a temporary 30-day pause has been put in place. If tariffs are imposed, we could see:

 

• Higher material costs for construction
• Supply chain disruptions
• Potential downward economic pressure

 

However, some economists believe the Bank of Canada may respond by cutting interest rates even further, potentially down to 1.5% by the end of 2025. Historically, lower rates have fueled housing demand and price growth—similar to what we saw during the pandemic.

 

If a full-blown trade war develops, it could either push prices up in the short term (due to inflation and supply shortages) or result in a market slowdown if economic uncertainty lingers.

 

While it’s still early in the year, Ottawa’s real estate market is showing resilience. Prices remain strong, and demand is steady despite ongoing economic concerns.

 

As we navigate 2025, it’s important to stay informed, especially with key events like interest rate changes, the federal election, and potential trade policies on the horizon.

 

If you’re thinking about buying or selling, now is the time to get your strategy in place. Whether you need guidance on market trends, mortgage advice, or simply want to chat about your real estate goals, feel free to reach out.

 

Let’s make 2025 a great year in Ottawa real estate!

 

The Papineau Group

Ottawa, Canada