Recessions for Home Buyers/Sellers in Ottawa: What You Need to Know

As the Canadian economy continues to navigate the lingering effects of the COVID-19 pandemic, the real estate market has experienced various changes, especially for those looking to buy or sell a home in Ottawa.

The uncertainty of the economy can make it challenging to make decisions, so you might be wondering how a recession might impact your plans.

With markets being so volatile and the Royal Bank of Canada forecasting a recession in Q2 and Q3 of 2023, we wanted to help both buyers and sellers navigate Ottawa’s real estate market this summer.

How do recessions affect the housing market?

A recession can impact the housing market in several ways. Typically, during a recession, unemployment rates rise, and people tend to spend less money. As a result, the demand for homes decreases, and the number of homes on the market increases.

This can lead to a buyer's market, where there are more homes available than buyers, and prices may decrease.

However, it's important to note that the Ottawa real estate market has historically been more stable than other major Canadian cities during economic downturns, and our strong government and tech sectors can help to mitigate the impact of a recession.

Median household incomes of Ottawans are also some of the highest in the country, helping dampen the effects of pricing swings.

Should I buy or sell during a recession?

The decision to buy or sell a home during a recession is a personal one that depends on your financial situation, your goals, and the state of the housing market.

If you're a home buyer, a recession could mean that you have more bargaining power and could potentially get a better deal on a home.

However, it's important to consider whether you're secure in your job and can afford to take on a mortgage during uncertain economic times.

If you're a home seller, you may need to be more flexible with your pricing and may need to wait longer to find a buyer. However, if you're selling a home in a desirable area or with unique features, you may still be able to attract interest from buyers.

How can I prepare for buying or selling during a recession?

If you're considering buying or selling a home during a recession, it's important to do your research and work with a real estate professional who can guide you through the process. If you're a buyer, you may want to focus on finding a home that you can comfortably afford and that has the potential for long-term value.

If you're a seller, you may want to consider making updates or improvements to your home to make it more attractive to buyers. It's also important to be patient, flexible during uncertain economic times, and prepared for a potentially longer buying or selling process.

While a recession can create uncertainty in the housing market, it doesn't necessarily mean that you should put your plans to buy or sell a home on hold. By understanding how a recession can impact the housing market and by working with a real estate professional, you can make informed decisions that align with your goals and financial situation!