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Ottawa Market Outlook for 2012

Posted on: January 13th, 2012 by Chris Scott

Most predictions are that Ottawa’s housing market will remain stable in spite of slower economic growth and the continued uncertainty in global markets. I tend to agree with this outlook. The only question mark relates to the upcoming federal budget. Substantial cuts to jobs in the public service could have a temporary effect on our housing market.

The fundamentals are still strong for Ottawa. Good job market, highly paid workforce, low vacancy rates, and continued growth in the NCR. Interestingly, indications are that this year’s market will be fuelled by move up buyers and downsizing baby boomers.

According to CMHC, “Ottawa’s housing market activity will moderate but remain stable going into 2012, supported by low financing rates, slightly improving labour market conditions and a positive migration outlook. Given the headwinds weighing on the economic outlook, as well as the increasing significance of an aging population, our forecast for dwellings in Ottawa favours more affordable housing choices”, said senior market analyst Sandra Torres.

It is expected that condominiums will lead the charge in 2012. This market is being driven by baby boomers looking to downsize. According to CMHC, more than 170,000 people in the capital region are between the ages of 55 and 74. It is also expected that more than 80 per cent of all residential construction started in Ottawa in 2012 will be in the suburbs, outside the Greenbelt.

The condominium boom will have an impact on the resale market. As more people opt for smaller condo spaces outside the Greenbelt, CMHC expects a record number of homes to be offered for sale. This will increase competition among sellers and could cause price increases to taper off, perhaps more in step with inflation at about 2 per cent.

Interest rates are expected to remain low for most of 2012 so Buyers will have money to spend and inventory to choose from.

I am always available to chat if you have any questions about the market or your house in particular.


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