It was another robust month of sales in Ottawa real estate. Over 1600 properties changed hands. That is a big number considering the 5-year trend is at about an average of 1500 units sold in July. Sales are up 6% compared to last year same time. Residential prices are up 5% over July of last year in both the condo and residential property markets. Nice gains for Ottawa homeowners for sure. Here is look at the numbers:
The 300k to 450k price range in residential properties accounted for 45% of all sales. This is a very active price range right now for Ottawa real estate. So hot right now! The condo market has made a great comeback and there are lots of factors to remain bullish on our local economy. It is a complex real estate market right now. Lots of moving parts on almost every deal. Including new financing requirements, shorter conditional periods, foreign buyers, and multiple offers. Lots to navigate right now. It is more important now to have the expertise of a great Realtor if you plan on buying or selling real estate in Ottawa.
If you are curious to know what’s happening in your neighbourhood please feel free to get in touch.
The Ottawa real estate market continues to impress. We are certainly the leader in Canada right now in terms of market activity.
Let’s look at the numbers. Our average price for a residential-class property was up 3.4% over last June, sitting at $449,200. In the residential-class property segment, there were 1,615 units sold which is a decrease of 8% over last June. In the condo market, 455 units sold, which is an increase of 11.5% from last June. The condo prices in Ottawa increased by 1.2% with the average sale price at $293,303.
The increase in condo unit sales is due to the lack of inventory in the residential-class property segment. The increasing prices have also pushed Ottawa buyers towards more affordable condo options. In previous years we had an oversupply of condos in Ottawa but they are now helping with the overall shortage of the residential-class properties. The average consecutive days on market for condos is down 39.4%.
There are still lots of bidding wars happening in the Ottawa market but it seems to be a little bit less competitive in the suburban neighbourhoods when compared with say 2-3 months ago. Inventory is still tight but there are signs that the market is settling down a bit. This will be welcome news to some buyers. If you are curious to know whats happening in your area please feel free to get in touch.
Housing inventory has been a concern this year and is so far not keeping up with the insatiable demand for Ottawa real estate. Our inventory is at historically low levels. Especially in the central locations. This will continue to put upward pressure on prices. In May I witnessed a few houses sell for way over their already high list prices in extremely competitive offer situations. Both were staged impeccably but were very small inside. Some buyers are getting desperate and will pay a huge premium for the right location.
Let’s look at the numbers. Our average price for a residential-class property was up 6.3% over last May, sitting at $464,401. In the residential-class property segment, there were 1,794 units sold which is a decrease of 3% over last May. In the condo market, 485 units sold…. which is an increase of 9.2% from last May. The condo prices in Ottawa increased by 3.4% with the average sale price at $281,247.
As prices rise up in this market it is so important to have the right representation. On the buying side, you need to make sure that you are making a prudent investment. For sellers, you want to make sure you are taking advantage of the hot conditions.
Ottawa is now the hottest real estate market in Canada! Move over Toronto and Vancouver. The market strongly favours sellers in most neighbourhoods. It is a good time to be a seller! Inventory has been tight most of the year. This past week I have seen a glimpse of hope as we are starting to get some new listings in the suburban neighbourhoods. Hope this will help balance the market a little. It is a challenging for buyers right now (and buyer agents).
Let’s look at the numbers. The market statistics for April are in. Our average price for a residential-class property was up 4.2% over last April, sitting at $455,212. In the residential-class property segment, there were 1,616 units sold which is an increase of 9.5% over last April. In the condo market, 416 units sold…. which is an increase of 33.3% from last April. The condo prices in Ottawa increased by 0.3% with the average sale price at $269,294.
The market statistics for March are in. No surprise that we are well ahead of last years numbers. Our average price for a residential-class property was up 8% over last March, sitting at $447,561. In the residential-class property segment, there were 1,302 units sold which is an increase of 11.8% over last March. In the condo market, 358 units sold which is an increase of 14.4% from last March and a price increase of 0.7% with the average sale price at $275,592 for condos in Ottawa last month.
The market continues to favour sellers in most neighbourhoods at the moment. However, I am starting to see more listings coming to market over the last few weeks. Hopefully, this will help balance the market a bit more with the busy Spring market on the horizon.
A story on the “hot” Ottawa housing market was recently featured in the Globe and Mail. I have been a Realtor for 14 years and I have never seen an article in this paper about Ottawa’s market. This National coverage is usually only reserved for the big markets of Vancouver or Toronto. Our housing market right now is just hard to ignore.
Prices are up again over last year. Our average price for a residential-class property was up 2.7% over last February, sitting at $429,600. In the residential-class property segment, there were 729 units sold which is a decrease of 5.3% over last February. This is likely due to less inventory. In the condo market, 250 units sold which is an increase of 7.8% from last February and a price increase to 5.6% with the average sale price at $274,174 for condos in Ottawa last month. With a combined total of 979 units sold in February and an overall decrease of 2.3%.
The Ottawa housing market has been extremely active over the past 6-9 months. It has been quite amazing to observe. New regulations and rising interest rates have some homeowners wondering if we have seen the last of these price gains. Here is a market minute update:
Our local economy is strong and consumer confidence is high. I really see no indications that this real estate market will cool anytime soon. Especially when I look at the most basic economic concept of supply and demand. Right now the supply is very limited in Ottawa and the demand is strong. We have only 6 weeks of inventory available right now in many neighbourhoods. This indicates a strong sellers market. We haven’t even hit the Spring market yet! If you are curious to whats happening in your neighbourhood feel free to get in touch.
This year our real estate market took everyone by surprise. At the beginning of the year, most economists were predicting a sluggish market with little or no price gains. The reality is that it was an incredibly strong year for real estate in Ottawa with solid price gains. This was fuelled by a lack of inventory in most neighbourhoods and segments of the market. The most significant change I found this year is that almost all styles of homes in various price ranges were extremely active. I had buyers looking for luxury homes over $1M and first-timers looking in the suburbs. In both cases, and everything in between, we were faced with lack of inventory and multiple offers. In some instances, we were competing against 12-14 other offers. It made buying a house more challenging for sure. Here is a statistical look and recap of the Ottawa market in 2017.
* All data is from Ottawa MLS statistics
** CDOM: Consecutive days on market
*** Percentage change is from 2016 stats
IMMIGRATION
Under the Liberal government, immigration has increased to over 300,000 annually. Many are settled into smaller cities but eventually make their way to the larger urban centres. Since Ottawa is the number 1 place to live in Canada, it is always a popular destination. This graph illustrates the future population growth in Ottawa.
POPULATION VS EMPLOYMENT
DEBT
The biggest concern I have right now is the mountain of debt that Canadians are carrying. We have more debt per capita than any other developed nation. This is something we will have to monitor moving forward.
FOREIGN BUYERS?
Contrary to what some people believe, Ottawa’s prices have not been rising due to foreign buyers. Not yet anyway. Right now foreign buyers own less than 0.7% of Ottawa condos and this is the same percentage as in 2014 (according to CMHC). In Vancouver, this is as high as 7.5%.
What I am seeing is some families relocating to Ottawa from Toronto. Basically cashing out in T.O. and moving down the 401. They are attracted to Ottawa because of its relative affordability, awesome lifestyle, and its location that is close to both Montreal and Toronto. As other major markets get too expensive we may start seeing more foreign buyers choose Ottawa. We are like the Switzerland of real estate.
SUPPLY/ DEMAND
Prices are usually determined by the most basic economic principle of supply and demand. This past year inventory was tight and demand was solid. I have many buyers that should have been in the market in 17′ but could not find a place because of tight supply and multiple bids. They along with many other buyers will now seek to find accommodation in 2018. I think our tight supply will continue into the new year. I think we are in for another competitive market in early 2018.
UNEMPLOYMENT
Unemployment is always one of biggest indicators when it comes to real estate prices. In Ottawa, we are fortunate to have a stable workforce anchored by the public service. Income levels support our current real estate prices and would still be able to accommodate new price gains. Essentially affordability is good. Especially compared to other markets like Vancouver or Toronto.
OTTAWA REQUIRED INCOME VS ACTUAL INCOME
MORTGAGE RATES
I sat in on a presentation by CIBC chief economist Benjamin Tal. He was asked if rates were going to rapidly increase in the upcoming few years. His response was that we won’t ever see very high rates again. We have different mechanisms and a central policy that we did not have in the 80’s/90’s when rates for homes are similar to what we are paying on credit cards.
MORTGAGE RULES: NEW STRESS TEST
The new mortgage rules will affect affordability for buyers. Insured mortgages will now need to be stress tested at the higher bank qualifying rate. This will reduce the average buyer’s purchasing power by about 20%. I am one of the few Realtors who actually agrees with this policy. We need to have buyers that can withstand any future increases in the mortgage rates. I think it is prudent and will help ensure that home buyers are not taking on debt that they can’t afford in the future. This protection will only help stabilize our market in the future.
OTTAWA CMA, MLS ® PRICE
MY PREDICTIONS FOR 2018
This time of year is usually pretty slow. However, I am off to present an offer for one of my clients in a snowstorm. We will be competing against 6-8 others. Basically what I am getting at is the market still has no inventory in many segments. I expect this trend to continue right through the Spring market. It will put upward pressure on prices again. I had some clients purchase a home in multiple bids in Hintonburg earlier this year. They were concerned that they paid too much. Buyers remorse is inevitable when you go way over asking price. This week the exact same unit with fewer upgrades came for sale and sold for 20k more than what my clients paid just 3 months ago. It tells me that some buyers in these areas are getting desperate to find accommodations. Once again we could be embarking on another very active and robust market in 2018. With the higher prices in the central locations, this will also help condo sales. Many buyers are being priced out of the freehold market and are turning back to condos as a viable option. For me, the wildcards in the market are the new mortgage rules and how Ottawa can absorb them. I think we can but it will make it harder for buyers in the higher price points. My gut tells me that there will be negative news from Toronto and Vancouver this year on the average price front. There are so many rules and regulations now for their markets to continue their torrent pace. How does this national coverage (if it happens) affect the consumer confidence here. Again, this is just my personal opinion here. If you are curious about what’s happening in your neighbourhood feel free to get in touch. We are always happy to provide you with sales data in and around your home.
PERCENTAGE INCREASE OF OTTAWA HOUSING PRICES
* Based on RES & CON MLS Sales
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One trend I can see gaining some traction in Ottawa real estate over the upcoming few years is coach houses. A coach house is a separate dwelling detached from the principal house that sits on the same lot. Personally, I think with the right property and location this could be a viable option for people in lieu of a basement apartment or nanny flat. Could also be perfect for being a purpose-built Airbnb rental. Let’s explore some of the regulations the city has in place for this.
Basic requirements to qualify for a Coach Houses in Ottawa:
Secondary Dwelling Units and Coach Houses: The City allows for either a Secondary Dwelling Unit or a Coach House, but not both.
Primary Building Types and Coach Houses: The City only allows Coach Houses to be built on lots which have a single family, a semi-detached, duplex or some townhouses. Only a single family home will typically have the lot space to conform.
Maximum Size: The City restricts the maximum size to no greater than 40% of the footprint of the principal dwelling unit, up to a maximum footprint of 95 square metres, in the rural area and 80 square meters in the urban area and may not cover more than 40% of the backyard.
The height of a Coach House: for the City allows for a 1 storey Coach House as-of-right (straight to building permit) in the urban area and a 2 storey Coach House in the rural area on a lot 0.4 hectares or greater.
Setbacks for Coach Houses: The are two setback distances to the rear and interior side lot lines to choose from: Either a 1-metre maximum setback AND/OR a 4m minimum setback
Minimum Access Route: An unobstructed 1.2 m wide access is required from a public street or travelled lane to the Coach House. This access may comprise a driveway.
Parking: No parking is required for a Coach House dwelling.
Privately Serviced Coach House: Minimum lot size of 0.4 hectares and must share one service well or septic.
Frequently Asked Questions:
What does one cost: typical coach house is between $200 and $300 a square foot. That would put the cost of a 500 square-foot coach house in the range of $100,000 to $150,000, It can vary from builder to builder. This is just a guideline.
Can a Coach House get its own Address?
Yes, once the building permit has been applied for.
Can a Coach House have a separate servicing connection?
The coach house can be submetered.
Can I build a Coach House and a Secondary Dwelling Unit?
No.
This is just a synopsis of some of the guidelines for this style of purchase. For more information check with the city at www.ottawa.ca/coachhouse
If you are considering buying a home in Ottawa with the intention of building a coach house, call me to discuss. We can help you find a house that will fit in with your requirements.
The Ottawa real estate market is still pretty hot, especially considering the time of year. Many Ottawa home buyers are looking to purchase before the new mortgage rules are implemented in January. Prices are up again over last year. Our average price for a residential-class property was up 3.2% over last November, sitting at $418,354. It is the number of houses sold that is impressive. In the residential-class property segment, there were 945 units sold which is an increase of 24% over last November. In the condo market, 294 units sold which is an increase of 27.8%. With a combined total of 1239 units sold in November and an overall increase of 24.9%. The prices may not have increased much from last year’s November but the number of units sold shows how active the Ottawa real estate still is.
As always feel free to reach out if you are curious to whats happening in your neighbourhood. I am always happy to help.
