“Hey Canadian Homeowner! What Do You Make in a Year?”

Ever wonder what the average annual income of an Ottawa homeowner is? How about what percentage of homebuyers are under 35 years old? Let’s dive into these questions and more. Spring has sprung and the market seems to be dictating that a typical, active Spring market is upon us. Historically speaking, the Spring market has brought lots of people out of the woodwork and into the mix with regards to buying and selling homes. I am going to provide you with some interesting statistics and information to help you, and anyone you know, better navigate the current real estate market in Ottawa this Spring. 

Over the last few months on my podcast, my Co-Hosts Greg Campbell, David Warren and I have been analyzing the recent trends and data to make predictions on where we anticipate the market will head by the end of 2023. I suggested in early January that the market would grow 6.8% by the end of 2023 and that we would see the number of transactions increase from 2022 as rates stabilize and more potential home buyers are out shopping in the market. For the time being, it seems things are heading in that direction. We have seen the average home price in Ottawa increase from $656,000 in December 2022 to $709,000 in February 2023 which is an 8% increase in prices in just two short months. We have also seen the average days that homes are sitting on the market decrease from up to 90 days in some areas of Ottawa to an average today of about 45 days. 

I have listed below the average home price in Ottawa from February 2022 to February 2023 to give you a better understanding of the trends we are seeing:

• February - $838,000
• March - $854,000
• April - $830,000
• May - $802,000
• June - $773,000
• July - $716,000
• August - $708,000
• September - $707,000
• October - $678,000
• November - $680,000
• December - $656,000
• January - $676,000
• February - $709,000

While we are looking at numbers, let’s get into some specific statistics about borrowers and the homes that people are buying in Ottawa. For some background, these stats were released by SAGEN, Canada’s largest private insurer against default.  SAGEN, CMHC and Canada Guaranty are the three main insurers in Canada and by law, Canadian banks can only provide mortgage financing to qualified homeowners with at least a 20% down payment, unless the mortgage is insured against default. 

These statistics by SAGEN offered us rarely seen insights into the borrower profile and home profile that they are seeing most commonly in our Nation’s Capital. 

Here are some of the most interesting statistics I found:

• Average borrower household income : $157,797
• Borrower’s average years in current job : 3.9 years
• Percentage of applicants under 35 years old : 60%
• Percentage of applicants with beacon score over 660 : 96%
• Average mortgage size : $561,966
• Average age of home : 24 years
• Average purchase price : $623,403
• Percentage of applicants w/ gifted down payments (any $ amount) : 28%
• Percentage of purchases that were detached homes : 21%

Although these don’t tell the full story, it is safe to say that some of these numbers were very surprising considering what we’ve been seeing day to day in the Ottawa market. For starters, from the clients I work with who are receiving a gifted down payment, I would say 80% or more of them are first time home buyers and of the first time home buyers I work with, I would guess that closer to 40% of those buyers are receiving gifted funds in some capacity from an immediate family member. The other number that may have raised some eyebrows is the first statistic listed, “Average borrower household income”. With this sitting at just shy of $160,000, it means that unless you are in the top 1% of income earners in Canada, you are very likely going to need a two income household in order to afford a single family detached home in our Nation’s Capital. Keep in mind that this is only for insured mortgages, so again, it doesn’t tell the full story of all home buyers but does give us a glimpse into some of the more interesting statistics in our current market. Did any of these numbers surprise you?

I, personally, am very excited to see where things head in 2023 for the Ottawa market. I don’t anticipate the supply will catch up to the demand any time soon and this will cause further increases in values across the board for Ottawa homes. Combine that with rates seemingly stagnating and the issues happening in the US right now with their banking system, some experts are saying the Bank of Canada may even LOWER rates on their next announcement which would turn more than a few heads as aren’t expecting this to happen until late 2023 or early 2024. These two factors alone will likely drive more buyers to the market this Spring and Summer season and will create a continued buzz in the Ottawa real estate market.

If you’re looking to stay up to date on the latest trends and stats in Ottawa, tune in every week on Tuesdays at 10am to “The Ottawa Real Estate Podcast” on YouTube and all streaming platforms and/or subscribe to “Paul’s Mortgage Insights” on LinkedIn. 

Thanks as always for your support and please don’t ever hesitate to reach out if you have any questions! I am always here to assist you in your mortgage needs. Have an amazing day!

-Paul S