It’s a new year, and you’re likely wondering what’s on the horizon for the Ottawa real estate market. Will prices continue their upward climb? Can we finally expect some relief from interest rates? Is now the right moment to jump into the market? We understand your questions and concerns and are here to provide the insights you need to make informed decisions.
We had the opportunity to sit down with Paul Rushforth to get his in-depth perspective on what 2025 holds. Paul’s been diligently studying this market for years, and his predictions are known for their accuracy.
He doesn’t hold back, sharing his expert forecasts on interest rates and their ripple effects on affordability.
1. What big surprises were you shocked to see in 2024 regarding real estate?
In 2024, the real estate market had its share of twists and turns. We knew interest rates would climb and stay high for a while, so that wasn’t exactly shocking. What did catch some attention, though, was how long it took for those rates to start coming down. By the middle to end of the year, we finally saw some relief, which was a welcome change, but the market still felt sluggish. It seemed like people were a little punch-drunk from the last few years, and once rates went up, they realized their disposable income wasn’t what it used to be. That hesitation definitely carried over into the housing market.
A big chunk of the market—about 30-35% first-time homebuyers and another good portion being investors—was basically stuck on the sidelines. With high Ottawa home prices and higher rates, it just didn’t make sense for many of them to jump in. Investors weren’t willing to take on losses every month, and first-time buyers couldn’t stomach the higher payments. That meant less housing market activity overall, especially in the move-up and move-down segments, which usually keep things moving.
Still, there were some surprises. Despite how it felt, sales numbers were actually up over 2023—granted, 2023 wasn’t exactly a banner year. The strong finish in Q4 really helped turn things around as rates dipped a bit, and some first-time buyers started coming back into the mix. It’s encouraging to see that momentum, and with more rate drops likely in 2025, there’s good reason to be optimistic. It wasn’t the big, robust year many hoped for, but it ended on a solid note, setting the stage for a much-needed rebound.
2. What kind of real estate market do you see in 2025? Buyer? Seller? Balanced?
The market is shaping up to be a bit of a mixed bag. We’re still in a seller’s market by the numbers, but it doesn’t feel that way.
In 2025, we will likely be in a balanced market, leaning towards a seller’s market. As the interest rates continue to come down and buyers regain some confidence, we’ll start seeing the early stages of a more balanced market.
A lot of pent-up buyer demand has been sitting on the sidelines, and potential buyers are ready to jump back in. First-time homebuyers and investors will likely play a bigger role in 2025, which should also get the ball rolling for move-up and move-down buyers. The inventory picture might still be a little sluggish at the start of the year, but come spring, we should see more listings hitting the market, giving buyers more to choose from.
Don’t expect things to go haywire like they did in 2022! This time around, price growth will be more gradual. We’re going to witness a return to a more typical Ottawa housing market, where all segments—first-time homebuyers, investors, move-up buyers, and downsizers—are active participants.
After a couple of unpredictable years, that’s a welcome change.
3. How will the 2025 real estate market compare to 2024?
The 2025 real estate market is shaping up to look pretty different from 2024, with some clear trends starting to emerge. Townhomes and condos are expected to be the most in-demand properties. Affordability is the driving force here, with first-time buyers and investors finally able to jump back into the market as rates come down and prices stabilize.
Builders are catching on to this trend and shifting their focus to higher-density options like townhomes, terrace homes, and condos, which have more doors under one roof. It’s more cost-effective for them to build multiple units under one roof than larger single-family homes. The demand for these smaller, more affordable properties will be stronger than we’ve seen in years—maybe even decades.
That’s not to say single-family homes won’t be popular. Prices have adjusted from the sky-high levels we saw during the pandemic, making them more accessible again. But they’ll likely take a backseat to the surge in interest in townhomes and condos. With rates dropping, first-time homebuyers and investors will create more competition in the townhome and condo market.
Unfortunately, rentals will remain a challenge. With so many people priced out over the past few years, demand continues to outstrip supply. While we expect some renters to transition into homeownership as rates decline, plenty of Ottawa residents will still need rental accommodations, keeping the market competitive.
Overall, 2025 looks set to bring a balanced mix of activity across all segments, but townhomes and condos will undoubtedly be the standouts.
4. How will the U.S. and upcoming Canadian elections impact the market?
Elections always bring a bit of uncertainty to the real estate market, and 2025 will be no exception. In the U.S., we’ve already seen how the lead-up to their election created a rush of activity in the first half of the year. It’s a pattern: sales and market activity ramp up early, knowing things will likely slow down as election time approaches. The Canadian housing market is poised for something similar.
With Prime Minister Justin Trudeau stepping down, a leadership race is underway, and a snap election before October is very likely. All this leads to added uncertainty, which could compress the timeline. We might see buyers and sellers act even more quickly in response to these developments, aiming to avoid the uncertainties tied to elections.
The key takeaway is that early 2025 will likely be very strong for real estate. People are already asking questions like, Which party will take power? What will their policies mean for the housing market? Add to that the job security concerns for those tied to political shifts, and you’ve got a recipe for hesitation. That hesitation won’t crash the market but will slow things down.
By fall, we’ll probably see activity taper off, with the market stabilizing rather than growing. This doesn’t mean the average price or sales will drop; it’s just that the pace will ease compared to earlier in the year. The 2025 fall market will likely trail behind the steady fall market of 2024.
My advice? If you plan to buy or sell in 2025, aim for the first six months of the year. Take advantage of the momentum and get ahead of any potential slowdown.
5. Have any new rules or election promises been announced that could impact the 2025 market?
There haven’t been any major game-changers announced yet, but we did see the introduction of 30-year amortizations, which could provide some relief for first-time buyers struggling to qualify for a mortgage. This move allows them to spread their payments over a longer period, reducing the monthly burden. However, it’s unlikely to impact the overall market dramatically.
As we get closer to a leadership change, we’ll undoubtedly see a flurry of promises and proposals. It’s important to stay informed and focus on the fundamentals: interest rates, inventory levels, and overall economic conditions. These factors will have a much more significant influence on the market than any short-term political maneuvering.
6. How could changes in interest rates affect the Ottawa housing market in 2025?
Interest rates are set to play a significant role in shaping Ottawa’s real estate market in 2025. The good news is we’ve already seen a few drops, including a half-point decrease in December 2024. We may see another small reduction in late January and possibly again in March.
If rates continue to trend downward as predicted—with a total drop of 0.75% to 1% over the year—we’ll see a much healthier market environment. While we’re unlikely to see ultra-low rates of 1% or 2% anytime soon, we might see fixed rates dip into the low to mid-3s and variable rates into the mid-3s. This is excellent news for those who have been patiently waiting for a more balanced and affordable market.
What happens next will depend largely on the state of the economy. If the economy shows signs of strength, rate cuts may slow, but rates could come down more aggressively if challenges persist. With 1.2 million households across Canada facing mortgage renewals in 2025, these adjustments couldn’t come at a better time. Lower rates will help first-time buyers enter the market and provide relief for existing homeowners looking to manage rising costs.
7. Are you seeing any rise or decrease in pricing and popularity in specific Ottawa neighbourhoods? What about the outskirts?
In 2025, Ottawa’s real estate market will see familiar patterns with some notable shifts. Suburbia will continue to attract families and buyers looking for affordability and space, making top Ottawa neighbourhoods like Orleans, Barrhaven, Kanata, and Stittsville hotspots for sales. However, due to the increased competition from new home builders, prices in these areas might not rise as quickly as in other parts of the city. Builders are putting up townhomes, condos, and terrace homes—exactly the types of properties buyers want right now—so there’s plenty of inventory to meet housing demand.
The downtown core and areas just outside of it could experience the most notable price increases. These neighbourhoods tend to have older homes and less competition from new builds, which can drive up housing prices.
The outskirts of Ottawa, including places like Rockland, Limoges, Pakenham, and Arnprior, still offer affordability, making them attractive. However, the price gap between these areas and the suburbs is gradually narrowing. With more employers requiring workers to return to the office, the appeal of living 30 or 40 minutes outside the city is starting to wane. Rising gas and commuting costs are giving some buyers pause, though the availability of new builds and affordable pricing—especially for townhomes—keeps these areas in play for many.
8. What areas in Ottawa should investors look into buying in 2025?
Investors will find 2025 to be a promising year to re-enter the Ottawa real estate market. After sitting on the sidelines due to high interest rates, many will now have opportunities to capitalize on improving conditions. The key is to focus on the right type of property and ensure you have a solid mortgage product that supports your goals. While townhomes and condos remain popular options, they may not immediately be cash flow positive, though they’re getting close. For investors willing to take a longer view, these properties offer the chance to secure a foothold before rates drop further and prices start to climb.
For those looking to maximize cash flow, properties with multiple doors—like duplexes, triplexes, and fourplexes—are the way to go. These units tend to offer better cash flow potential, especially in less developed neighbourhoods like Vanier. While price appreciation might be slower in these areas, the steady rental income makes them a strong choice for investors focused on monthly returns.
If appreciation is your goal and cash flow is less of a concern, consider higher-end neighbourhoods like the Glebe or the Golden Triangle. These areas require deeper pockets upfront, but the long-term value growth can be significant. It’s a trade-off: higher purchase prices and smaller immediate returns for greater equity gains over time.
My advice for 2025 is simple: get in early. Rates are expected to continue dropping, which will push prices up as the year progresses. By acting now, investors can secure properties before competition heats up and affordability tightens further.
9. Do you see any trends within demographics? (First-time home buyer trouble, millennial surge, etc.)
First-time homebuyers are poised to make a significant comeback in 2025. This demographic has been largely absent from the market over the past two years due to rising interest rates and high prices, forcing many to remain in the rental market, pouring money into monthly payments without building equity. Now, with rates coming down and conditions improving, they’ll likely drive much of the market activity in the coming year. Investors are also expected to become more active in 2025, further increasing demand and competition in the market.
This influx of buyers will have a ripple effect on the entire market, driving sales and potentially pushing prices upward. When they step in to buy entry-level properties like townhomes and condos, it allows move-up buyers to make their next purchase, opening up options for downsizers or retirees. The chain stalls without first-time buyers, and that’s precisely what happened over the past couple of years. But, with rates trending down, this bottleneck should start to clear.
Sellers need to understand that the market is shifting towards a more balanced state. Homes priced right and show well will sell, but overpriced or neglected properties will likely linger on the market. It’s essential to work with an experienced agent who understands the current market dynamics, can offer essential presentation tips, and can provide accurate information about how much Ottawa homes have sold for.
For buyers, especially first-time homebuyers, the message is clear: get into the market sooner rather than later. By spring, inventory typically increases, offering more choices, but the competition will also heat up. The same townhome you snag now for $575,000 could cost $650,000 by summer.
I’d love to share a little story with you. Years ago, a young lady was looking to buy a townhome in the suburbs. I advised her to buy, as prices were not going to go down, but she insisted on waiting for the market to crash. She didn’t end up buying the townhome, which was selling for $325,000. The following year, that same townhome was selling for $355,000-$365,000, but she continued to wait. Ultimately, she ended up buying the same townhome for $625,000. She missed out on all that equity by not buying when the market was favourable.
A few months ago, we worked with a young couple considering a townhome. I gave them the same advice—buy now before prices increase–but their mortgage broker, lawyer, and parents all advised against it. The couple decided to trust us and purchased a townhome for $575,000. Now, that property is already in the 6s, and it is predicted that by summer 2025, it’ll be worth $650,000-$675,000! This couple was able to build equity by trusting the advice we gave them and getting into the market before prices increased.
10. Any final words to share about Ottawa real estate in 2025?
The Ottawa real estate market in 2025 is shaping up to be a solid year—stronger than 2024 but not a record-breaker. The key drivers will be the anticipated interest rate cuts, likely by another 0.75% to 1%, which will open the door for first-time homebuyers and investors to come back into the market in significant numbers. With that influx, average home prices are expected to rise, though not at the skyrocketing pace we saw during the pandemic. It’s a steady, manageable climb, which is exactly what a healthy market needs.
It’s important to remember that there are many different opinions and predictions about the 2025 real estate market; you can find information in newspapers, podcasts, and on social media. No one can predict the future with absolute certainty, so evaluating the sources and considering the expertise behind the predictions is crucial.
What sets the Paul Rushforth team apart is our understanding of current market dynamics and commitment to staying ahead of trends. We don’t rely on opinions or guesswork—we study the market closely, breaking down data to give our clients the clearest picture of what’s happening and coming next.
11. What qualities or attributes should individuals look for when selecting a real estate agent to assist them with their transactions in 2025?
First, you want someone who is highly educated about the market. Real estate is constantly shifting, and having an agent who knows the pulse of what’s happening—and what’s coming—is invaluable.
That’s what you’ll find with Paul Rushforth agents. Our team stays on top of inventory, trends, and opportunities, whether it’s resale properties or new builds.
Being well-connected is equally important. Paul Rushforth Real Estate has strong relationships in the industry, including ties to builders and developers, giving you an edge, especially in a competitive market.
If you are a first-time homebuyer, you’ll want an agent who understands your unique challenges and can guide you through what can be an overwhelming process. We’ll help you find a home and ensure the entire experience feels smooth and manageable.
Technology is also playing a much bigger role in real estate these days. At Paul Rushforth, we utilize tech that makes buying and selling more efficient. From virtual tours to market analysis tools and online resources, we leverage technology to save you time and keep you ahead of the curve.
Choose the Right Real Estate Team in 2025!
No one understands Ottawa housing market trends, pricing, and timing like the Paul Rushforth team. If you plan to buy, sell, or invest, our experience and commitment ensure you achieve your goals in 2025.
Talk To Us About Your 2024 Ottawa Real Estate Needs: Buyer / Seller
Paul Rushforth Real Estate is a member of the Ottawa Real Estate Board, the Ontario Real Estate Association, and the Canadian Real Estate Association.