ANNUAL REAL ESTATE REPORT: FAIRWINDS 2018

RECAP OF 2018

The Fairwinds resale numbers for 2018 are very strong. I am sure that everyone noticed that for sale signs in the neighbourhood did not last long. The market got off to a fast start early last year. Inventory levels were at record lows and multiple bids were common on almost all houses. In the townhouse market, it was extremely competitive. We had investors, first-time buyers, and downsizing “empty nesters” all competing in this segment of the market. This continued right through early Spring. The activity was peaking in and around April when the military shoppers were in town on their house hunting trips. They were mostly shopping for detached homes. Things started to level out a little bit as the year went on. Still a strong seller’s market but not quite the fever pitch we saw early in the year. Overall the sales in all segments were up 23%, that is an accomplishment considering there was still not enough supply to keep up with the demand. Let’s look at the MLS resale numbers.

CDOM: Consecutive days on market

KEY INDICATORS 

AFFORDABILITY

Ottawa households have one of the highest household income averages in Canada. If you see the graph on the following page you can see that prices are still relatively affordable for Ottawa buyers. This graph looks very different for buyers in cities like Vancouver and Toronto.

IMMIGRATION

If you Google best places to migrate to in Canada, Ottawa seems to be the number one choice. I am seeing many more immigrants choose Ottawa as their final destination. Toronto and Montreal are of course popular but when someone researches where to live in Canada,  Ottawa comes out close to number one in almost all categories.

The common misconception out there is that these immigrants do not have the funds to purchase real estate. That is not always the case. In many instances, it is their credit or lack thereof that may be holding them back. In any case, these immigrants are coming at a record pace and will likely be purchasing real estate in the future.

	MORTGAGE RULES AND INTEREST RATES Banks have been forced to stress test buyers at a full 2 percentage points higher than the interest rate of their mortgage. This can impact purchasing power by almost 20%.  I see the need for this but as house prices rise in major market centres there has been plenty of pushback. Interest rates have been slowly rising and this has put pressure on affordability for some buyers. If this trend continues it will have an impact on the market for sure. With the economy being more sluggish, the need for further increases may be curbed.
	LOCAL ECONOMY Ottawa has always been an underrated city in my view. We have a strong local economy with one of the highest median household income averages in Canada. Our unemployment rate is at historically low levels. It is a prototypical government town that has a growing technology sector and lots of solid, high paying professional jobs. It is only a matter of time before our prices surge and we become a global player in real estate. For a world-class capital city, our prices still might be a bargain. Time will tell!
	ELECTION YEAR Housing affordability has climbed up to be one of the top issues for millennials. This makes it an election issue. A recent poll found that 64% of millennial voters want the government to do something about climbing prices. We will see the politician’s respective platforms later this year. My prediction is that some of these platforms will have policies that will make it easier or more affordable for buyers to purchase. It could mean the return of 30-year amortizations. The stress tests might be eased or there could be a new policy altogether. Something to watch for sure.
	MILITARY AND TECHNOLOGY The DND move to the Nortel campus has been a major factor in the recent price appreciation in many of Ottawa’s west neighbourhoods. Interestingly, it is still a few years away from being fully operational as they phase employees into the new headquarters. In 2018 there was a major announcement that another prominent military operation headquarters will be built in close proximity within 10 years. The new building will house over 4500 employees. This will have an impact down the road on our real estate market. The location has not yet been announced.
	LIGHT RAIL LRT line will eventually make its way out to our suburbs. Still lots of discussion on when this will happen. Recently there was talk that Barrhaven would be first in line for light rail. I hope our new council will see that Stittsville should be the priority based on population growth. We had one report that projected the rail line to come right into Fairwinds at Huntmar/Maple Grove. This would be the best case and would be perfect for our community.

MY PREDICTIONS FOR 2019

I am very bullish on the future of real estate in Stittsville. All the economic indicators are there to support growth and price appreciation.  As a Stittsville resident, I can also speak of the wonderful community feel and vibe we have here. It is unique and should be celebrated and not taken for granted. It does not exist in other neighbourhoods in the city. I project we will remain in a seller’s market for most of the year. As the year progresses we should see more supply and eventually get back to more balanced conditions by the end of 2019. If you want to know the value of your home please feel free to get in touch.

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