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
If you are curious about your homes worth please fill in this form for a no-obligation market assessment.
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.
The Ottawa housing market results are in and the numbers for the average sale prices are up again month over month. Our average price for a residential-class property was up 8.6% over last October, sitting at $425,256. The condos are up 6.9% sitting at $269,604.
Units sold cooled a little in the condo market last month as for the first time in awhile they dropped well below the double-digit mark. 261 Condo units were sold last month compared to 255 in October 2016.
All in all, this has been another very active month for Ottawa real estate Look at the increases in the home prices. Really surprising to see such big numbers over last year. Nobody predicted this. There is some concern that the new mortgage rules will cool that early in 2018. I am not so sure it will have a big impact on Ottawa. For the most part Ottawa, home buyers are more conservative than say Vancouver or Toronto buyers when it comes to how much of their income they put towards real estate. Buyers will end up affording about 20% less in purchase price with the new rules. It will force people to stay within their comfort zone in terms of what they purchase. Might slow things slightly short term but in the long run, it will ensure that we continue to have a healthy balanced real estate market in Ottawa.
The Ottawa housing market results are in and the numbers for the average sale prices are up again month over month. Our average price for a residential-class property was up 8.2% over last September, sitting at $416,464. The condos are up 3.9% sitting at $261,548.
The Ottawa condo market was busy again. Units sold are still in the double digits compared to last year at this time. 311 Condo units were sold last month compared to 269 in September 2016. The major strength in the condo market is still the number of units being sold.
This fall season continues to be very active for Ottawa buyers and sellers. There has been a slight slow down in units sold -1.6% for the residential-class. That coupled with the fact that demand is strong as let to a very active real estate market here in Ottawa. If you are curious to know whats happening in your neighbourhood please feel free to get in touch.
Earlier this week we were featured in the Ottawa Citizen. Check out the article here: Ottawa Citizen Article
The Fall season is almost upon us. The kids are getting settled into school and everyone is getting back into a routine. Our little man Aiden just had his first day of school. It was pretty hard seeing him board his school bus for the first time! Kids grow up quick.
The Ottawa housing market results are in and the numbers for August are very positive. Our average price for a residential class property was up 7.6% over last August. We are sitting at $420,355. We are up over 7% YTD. Incredible numbers really considering most economists predicted the opposite.
The Ottawa condo market was busy. The prices were down slightly by less than half a percent. The average price of an Ottawa condo was $270,768. Where I see strength is in the units sold. We are up 22% over last years numbers. This has really been a nice turnaround for condos this year.
This fall season will continue to be very active for Ottawa buyers and sellers. There are still many buyers in the marketplace who were unable to secure their home in the Spring/Summer due to increased competition and tight supply. I expect this trend to continue for at least the next 90 days. If you have any questions on the market please let me know.
I hope everyone is having a great summer so far. Our local housing market continues to impress. In July the market was once again well ahead of where we were this time last year. Let’s look at the numbers.
These are the average numbers. There are some areas that are experiencing double digit increases over the same period last year. Anything West of downtown to Carlingwood would be in this category. Buyers want to be central and are willing to pay a hefty price to get there. Take Westboro/Carlingwood areas as an example. The average price here for a single is $758,000 that is up 11.5% from a year earlier.
Another reason for the strength in our market is that condo market is making a comeback. Much of the inventory that has been stale the last few years is being sold off. This has really helped to strengthen the market as a whole. Many condo owners (myself included) have rented their condos in the past few years waiting for better selling conditions. The time might be right to list for those condo investors. The condo market sold 332 units in July 2017 which is an increase or 19.4% compared to last years July.
Inventory continues to be an issue in some locations-especially in the central areas. The amount of new listings coming to market is lower than the 5-year average. Buyers are still patiently waiting for properties to come available. We are seeing a more active summer because many buyers were unable to secure their home in the Spring.
Interest Ratescould be a factor moving forward. As our economy strengthens it is natural that our key interest rate will rise. After many years of steady rates, we have finally seen a rise in the Bank of Canada rate. It recently increased by a 1/4 of a percent. Lenders have since followed suit. This will add about $12 more per month on average for every 100k of a mortgage. It will affect affordability but not enough to cool the Ottawa housing market. Something to keep our eye on. Ottawa is such a spread out city. There are different market trends happening in each micro market of the city. If you are curious to whats happening your neighbourhood let me know. I would be happy to provide you with a list of Ottawa homes that have recently sold around you.
Ottawa’s market has been thriving for the first half of 2017. Month over month we are seeing an increase in units sold and average sale prices increasing from last year. Compared to last year at this time, Ottawa homes sales units in both residential and condos property classes are up 13.5%. The average residential sale price for June 2017 was $434,502 up 8.8% from last year’s June and the average condo sale price for June 2017 was $289,950 up 9.4% over last year’s June. The number of Condo units sold per month continues to stay strong with an increase of 23.3% compared to last year’s June. This is the 5th year in a row the number of units sold both residential and condo properties have increased in June. The demand is still high right now in certain neighbourhoods. I predict that in the second half of the year we will continue to see record-setting prices for units sold and average price.
It was raining sales in the Ottawa real estate market last month. Amid one of the rainiest months ever, we also experienced the busiest real estate market in Ottawa history. We absolutely shattered the previous record by over 315 units. The Ottawa residential market has been hot for a while now but the condo market is also coming alive which is leading to this extremely active market. Condos sales activity is up 44.6% over May of last year. In total 2300 units were sold last month! That is up from 1919 units sold in May of 2016. This includes both condos and residential freeholds.
In most neighbourhoods, Ottawa is in a seller’s market. There is just not much inventory and lots of demand. Multiple offer situations are very prevalent in the central neighbourhoods. Freehold prices are up 7.4% over May of 2016 while Condo’s are up 2.4% over May of last year.
Now more than ever it is important to get the advice of an agent. Pricing/marketing strategies are different for every neighbourhood. If you are interested to see what your home would sell for in this market please feel free to get in touch.
If you are curious about your homes worth please fill in this form for a no-obligation market assessment.
The balanced market of the past few years has seemed to evaporate overnight. The market is extremely competitive right now in Ottawa. A shortage of good inventory and favorable demand has shifted the balance towards the sellers. Bidding wars are once again a common practice here in Ottawa. The exception this year is that some of the bidding wars are escalating high above the listing prices. In one instance I witnessed a home sell for 100k more than a sellers list price. It started in March and was mostly contained to the central urban market. Neighbourhoods like Hintonburg and Westoboro are especially hot. That heat has extended to the suburban market, It is not as active but in some segments of the market, every well-priced home is in multiples. As an example, it took my clients 5 offers to secure a Kanata townhouse. They were over asking on all 4 of the previous bids. Every neighbourhood has different trends. Much it will depend on the available inventory in each area. Comes back to simple economics sometimes. Low supply + high demand = Craziness in the Ottawa market.
Let’s examine the April resale numbers for the Ottawa market:
This upwards push is fuelled by a combination of high consumer confidence and good local economic conditions. Houses sold over 1M doubled this April compared to last year. There were over 83 properties sold in the 7 digits! This is an interesting trend to keep an eye on. If you have questions about your neighbourhood trends feel free to get in touch.
