The Ottawa real estate market in February 2025 presented a mix of signals, leaving both pessimists and optimists with plenty to debate. Sales were down compared to last year, but pricing and other key indicators suggest the market could be positioning for growth in the months ahead. Here’s a breakdown of the latest trends and what they mean for buyers and sellers.
Freehold Market Trends
- Sales Volume: February saw 500 freehold home sales in Ottawa, up from 426 in January but down 15% from February 2024’s total of 573. This remains well below the typical February range of the high 500s to 600s.
- Average Price: The average sale price for a freehold home hit $783,000, slightly above January’s $773,000. This is the highest February average since the 2022 peak of $892,000.
- Inventory & Market Balance: Inventory levels dropped from 3.2 to 2.8 months, indicating stronger demand. However, the Sales to New Listings Ratio fell to 46%, the lower end of a balanced market.
- Time on Market: Homes sold in an average of 34 days, down from January’s 51 days, suggesting a strengthening market.
Condo Market Trends
- Sales Volume: Condo sales reached 203 in February, up from 186 in January but the lowest February total in eight years. Downtown condo apartments remain the weakest segment.
- Average Price: Condo prices averaged $430,000, down from January’s $439,000 and slightly below February 2024’s $433,000. Prices have remained relatively stable in the $410,000 to $455,000 range for over two years.
- Inventory & Demand: Overall condo inventory decreased to 3.26 months, technically within seller’s market territory. However, downtown condo inventory sits at over 7 months, firmly in buyer’s market range.
- Time on Market: Condos took an average of 51 days to sell, consistent with a balanced market.
Ontario’s Mortgage Renewal “Cliff” – Should We Be Worried?
A major talking point in recent weeks has been Canada’s so-called mortgage renewal cliff. With 60% of all mortgages set to renew by the end of 2026, concerns are rising about homeowners struggling with significantly higher interest rates. However, the data tells a different story.
- Mortgage Delinquencies: While delinquency rates have increased by 50% in Ontario over the past year, they remain historically low at just 0.22%. For context, this is the same level seen between 2012-2019, well before interest rates hit record lows.
- Comparing to the U.S.: Even at their worst, Canadian mortgage delinquency rates remain significantly lower than the U.S., where delinquency rates have historically been four to five times higher.
- Stress Test Protections: Since 2016, Canada’s mortgage stress test has required borrowers to qualify at a minimum rate of 5.25% or two percentage points above their actual mortgage rate, ensuring that most homeowners renewing in 2025 have already been vetted for higher rates.
Final Thoughts
While Ottawa’s real estate market remains unpredictable, the data suggests that fears of an imminent collapse may be overblown. Freehold homes continue to show resilience, and while the condo market faces challenges—particularly in the downtown segment—opportunities exist for buyers looking to enter the market.
For those considering buying or selling, the best strategy remains the same: focus on your personal circumstances rather than trying to time the market. If you’re looking for expert advice on navigating Ottawa’s real estate landscape, book a no-pressure consultation today.
Stay tuned for next month’s update, and as always, make informed decisions based on the data—not the headlines.
