The new year is officially underway, and a consistent theme remains: balanced conditions define Ottawa’s housing market. But let’s pause and consider, balanced in relation to what? Balanced for whom? Outside of the headlines and big-picture statistics, the term “balanced” doesn’t feel very applicable.
There is momentum beyond preparing for the spring market. And it’s not the typical movement that Ottawa is known for. So let’s look at what the data tells us (source: OREB):
- Total residential sales were 617, down 9.2% YOY
- Average sale price (all property types) was $641,436, down 4.5% YOY
- Benchmark price declined modestly with small decreases across all property types
- New listings were 1,522, up 8.8% from January 2025
- Active listings reached 2,673, an increase of 22.7% from January 2025
That’s fewer sales, more inventory, more choice for buyers, and more competition for sellers. With months of inventory at 4.4, Ottawa’s market remains balanced, but the context is important. If you sell nearly 10% fewer homes year after year, that’s a contraction. And when absorption rates fall while inventory rises, leverage shifts. The shift may be quieter (for now), but it is significant.
Absorption Is the Story
Absorption is the pace or rate at which listings are sold in comparison to new listings that enter the market. Currently, homes are sitting longer across the board. Historically, Ottawa has been defined by steady, incremental trends. We rarely see drastic increases in inventory or significant decreases in absorption, but that is exactly what’s happening.
Some of this may be a return to normal after the extraordinary 2019–2023 run. That period distorted expectations and compressed timelines. We became accustomed to speed, and now we’re adjusting to something slower. Beyond that, the idea of a unified “Ottawa market” continues to be undermined when we segment by property type.
Single-Family Homes
Here we’re still in balanced territory, but the trend is starting to shift in favour of buyers. Sales fell 13.8% YOY, and the average sale price softened slightly (although the median price remained the same). So, even though inventory is balanced and pricing has not collapsed, leverage has begun to shift. Sellers must work a little harder, and buyers are starting to dictate the tempo.
Condos & Apartments
These were already sitting in buyer territory going into the new year. Months of inventory is still elevated at 6.8 months (down from 7.9 in December), and sales rose from 78 to 95. Nevertheless, absorption is still soft. New and active listings rose with the seasonal influx, and the average sale price decreased both month-to-month and year-over-year. Negotiation power is real… but this has been the case for some time now.
Townhomes
This is where things get interesting because inventory climbed sharply in January. New listings increased 45.8% compared to January 2025, and active listings rose a staggering 67%. Although sales were up 6.4% YOY, the average sale price fell 3.3%. Due to the new supply, months of inventory rose to 3.3, shifting leverage slightly despite still being balanced.
If movement happens in 2026, this could be the segment to watch. With affordability constraints pricing some buyers out of single-family homes, townhouses provide a middle ground. New listings entering this category could even cause some volatility. Kanata, Stittsville, Britannia, and Bell’s Corners are some interesting areas to watch, especially as defence and military relocations affect demand in the west end.
The Spring Market Question
There’s an assumption baked into Ottawa real estate that spring fixes everything. We’re already hearing it. Just wait, things are going to heat up. Ottawa always has a strong spring market. But what exactly does “strong” mean right now? Price stability? Healthier absorption, maybe?
How much of Toronto’s record-high mortgage delinquency is being factored into the larger national picture as well as our local one? If Ottawa expects to lose roughly 40,000 federal positions over the next couple of years due to attrition and workforce adjustments, are we accounting for the resulting drag? And if baby boomers are downsizing in larger numbers, how does that huge supply over a compressed window of time affect prices?
You can’t simply assume historical seasonality overrides the very real structural changes we’re currently seeing unfold. Ottawa does tend to follow predictable curves, but a spring uptick in sales volume does not automatically equal a strong market. It might simply mean marginal improvement within softer conditions. What we need to do is redefine strength for 2026.
Movement in a Stable City
The irony is that Ottawa remains fundamentally stable compared to other Canadian cities. But we are experiencing sharper year-over-year swings than usual. And that is certainly not typical of us. When a city known for steady 2-4% annual growth begins to see double-digit shifts in volume or absorption, that is a cause for concern and further investigation.
There is also a generational overlay here. Boomers are exiting the market in greater numbers. Millennials who can buy have longer time horizons. The younger generation of homeowners is entering the market later and needing to rely more on family support (whether as cosigners or financially for larger down payments). This causes stratification. Participants have different motivations, which lead to varying levels of urgency.
We are clearly transitioning. What happens next is still unknown, but it’s being driven by caution and uncertainty. Continuing to use the term “balanced” without proper qualification risks heavily oversimplifying the situation.
How to Approach 2026?
The practical takeaway is that if you want to make a real estate move in 2026, you need to start preparing yesterday! That does not mean rushing into listing tomorrow or buying right away, nor does it mean trying to time the market. You still want to be patient and curious, but get your finances in order. Understand your situation, know your goals, keep your emotions in check, and don’t let anyone pressure you.
Prepare yourself so that when the time comes for you to act, you can do so with confidence. At Top Ottawa Homes, we love exploring the statistical nuances of the market and get to see far more properties than your average realtor. We’ll look at your options and customize a strategy, even if it won’t be implemented until later.
Reach out to Top Ottawa Homes today!
