2023 YEAR END REAL ESTATE MARKET UPDATE FOR STITTSVILLE

STITTSVILLE HOUSING MARKET 2023 IN REVIEW

Stittsville remains a top choice for Ottawa home buyers. I work with dozens of military members who relocate to Ottawa each year and they often have our community at the top of their list. Our community’s appeal is spreading. During the early days of the pandemic, we out paced every other area in the NCR for home price growth. However, rapid price increases can make an area vulnerable when the market slows down. This was the case this past year as we had some higher-than-average price drops when compared to the rest of the city. In my opinion, this upcoming year we will see more stability with modest price gains. Here are some of the key indicators that will determine where our market will go:

KEY INDICATORS

Interest Rates and Inflation

As inflation has risen the Bank of Canada has hiked interest rates to cool the market. So far they have managed to get inflation down from a high of 8% to 3.1%. Still off from their 2% target. CMHC reports that only 300,000 homeowners have renewed mortgages at new higher rates. In the next two years, 2.2 million households will face increased rates. That is a big number and if the rates don’t fall soon it will cause lots of financial pain for many Ottawa homeowners. Analysts suggest this may prompt the BOC to cut interest rates in the first half of the year. I believe our housing market hangs in the balance with BOC decisions. If rates fall our market will be robust. If they stay the same I think it will be a very balanced market. If they rise again this year, God help us! My prediction is that rates will come down in time for the Spring market and will stay in the 4-4.5% range indefinitely

Immigration & Population Growth

Canada continues to lead G7 countries in population growth with record immigration this past year. If this continues we will see our 40 million population double in 25 years. Big cities like Ottawa will grow to accommodate but will our major cities grow fast enough? With newcomers, we will see supply challenges continue in the future with added pressure on rent and housing prices. My belief is the housing shortage will be the number one issue in the years ahead unless the city, province, and federal governments get serious about changing course now. In Ottawa, builders are facing high costs and ridiculous wait times to get permits and develop. The added costs go back directly to the consumer.

Supply and Demand

The fundamental economic principle of supply and demand lies at the heart of economic dynamics. Over the past 5 to 6 years, Ottawa has grappled with a shortage of supply, reaching its lowest point in February 2021. Coincidentally, prices have experienced a rapid ascent, reaching a peak frenzy when inventory levels were at their lowest. Interestingly, steady demand characterized the early months of last year, gradually waning as time progressed and interest rates hiked. During this time many individuals opted against selling their homes, thus eliminating much of the supply as well. In short, we ended the year with a balanced market with lower than average sales and less supply available. However, if historical trends are any indication, this equilibrium may be short-lived, as the continuously growing city of Ottawa is likely to revert to a seller’s market sooner rather than later. Especially if we see some rate decreases from the BOC.

NEIGHBORHOOD HIGHLIGHTS