Ottawa gears up for spring housing market amid tariff chaos

Tariff turmoil may have dominated the news agenda in Ottawa in recent weeks – but the city’s spring housing market is also rapidly coming into view, with little indication yet of how that economic unpredictability will weigh on sales activity either there or across the country.

Listings jumped in Ottawa at the start of the year compared with December, and uncertainty over a potential trade war with the United States was described by the Canadian Real Estate Association (CREA) as one of the main reasons behind a January slide in sales in the city.

Questions about the potential impact of those tariffs may not be the first questions Ottawans are asking when they consider applying for a mortgage, but they’re certainly a big factor in their decision, according to Smart Debt Mortgages broker Chris Allard.

“It makes the decision-making process of picking the right mortgage very daunting because they don’t quite understand what the economics will look like and quite frankly, none of us really do,” he told Canadian Mortgage Professional.

“We can’t predict the future, but those projections are getting more and more difficult to make, and so we’re just having to have lengthier conversations with borrowers: ‘If this happens, then that…’ and that’s OK, but it makes for a lot of moving parts.”

What will homebuying look like during Ottawa’s spring market?

Allard was speaking to CMP the week before Trump pushed ahead with punishing 25% tariffs on all Canadian imports (except energy, which was slapped with a 10% charge), sparking a wave of counter-measures by Canada and an eventual retreat, with most of those measures waived until April 2.

Uncertainty may be the prevailing mood across the country but prospects are still good for a strong spring housing market in Ottawa, Allard said, especially for properties that don’t require additional refurbishment.

“I think if the homes for sale don’t need work, there will be transactions,” he said. “If the homes for sale need renovations, I think they’ll take longer to sell. I say that because the Ottawa consumer these days likes to buy a finished product and historically, we did a ton of Purchase Plus Improvement programs, both on the insured side and the conventional side, but those numbers are down.”

New Equifax data shows Ontario's mortgage delinquency rate increased to 0.22% in Q4 2024. Joanna Lang of Outline Financial notes that while delinquencies are rising, they remain below historical levels.

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That Sagen program allows homebuyers to incorporate home improvement costs into their mortgage with downpayments starting from 5%.

But difficulties finding tradespeople and rising costs could be part of the reason behind its milder uptake in recent times.

“When you start to look at the cost of doing that renovation that you want, it kind of outweighs the value in the home,” Allard said. “And so people are opting not to do the renovation and are hoping to buy the home that’s already finished the way that they want it.”

Still, a specific type of homebuyer is still interested in tapping into renovation funds: those hoping to build a multigenerational household and accommodate other family members such as parents or grandparents, according to Allard.

2025 marks first spring market with new mortgage affordability rules

Last year, the federal government introduced new measures to boost housing affordability across Canada: an extension of 30-year amortization options to first-time homebuyers and any buyers purchasing newly-built properties, as well as a hike in the mortgage insurability cap to $1.5 million.

Those longer amortizations are proving a strong option for younger buyers and could continue to spur activity in Ottawa looking ahead, Allard said.

“Most of the first-time homebuyers who are buying with less than 20% down are asking for the extended amortization, some of them because they qualify that way but for many of them it’s just because they prefer to have the more comfortable cashflow,” he said. “So I think that’s made a material difference in a borrower’s financial situation.”

As for the insured mortgage cap hike? “I haven’t really noticed a big difference on that front, although I would suspect that as we get into the spring market, there’s probably going to be some of those single-family homes that might be $1.1 million that we might start to see at 10%, 15% down instead of the 20% down,” he said.

“We definitely had a few clients in our pipeline who are now able to buy at the price point that they qualified for, but they didn’t have $200,000 in savings for it. So I think it’s a good change.”

Source CMP
By Fergal McAlinden