Market Watch

Market Watch


Record-breaking December, contributes to a strong 2015

Ottawa, January 6, 2016 – Members of the Ottawa Real Estate Board sold 703 residential properties in December through the Board’s Multiple Listing Service® System, compared with 638 in December 2014, an increase of 10.2 per cent. The five-year average for December sales is 653. The total number of residential and condo units sold through the Board’s MLS® System throughout all of 2015 was 14,658, compared with 13,919 in 2014, an increase of 5.3 per cent. Separately, residential and condo unit sales each outperformed the 2014 numbers.

“Looking back at the 2015 market, we started the year off with extreme cold temperatures in the first quarter of the year, but that didn’t stop homebuyers,” says new President of the Ottawa Real Estate Board, Shane Silva. “We saw the busy spring selling season pick up as early as March this year, and continue well throughout the summer, with a small dip in July, followed by record-breaking sale numbers in September. Three months later, December broke the record for the highest number of residential and condo properties sold at 703 units, only comparable to 2011, when 699 properties sold.”

December’s sales included 160 in the condominium property class, and 543 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“The listing inventory for both residential and condos trended higher all year, showing signs of tapering off in October,” says Silva. “Increased inventory levels contributed to the market favouring Buyers for much of the year; however as the inventory levelled out in the fall, we moved into more balanced conditions. Cumulative days on market increased to 109 days in December, while the average for the year comes in at 86 days. Average residential sale prices are up slightly over last year, which is great for the Ottawa market. All combined, these indicators point to a stable real estate market.”

The average sale price of a residential-class property sold in December in the Ottawa area was $386,961, an increase of 5.5 per cent over December 2014. The average sale price for a condominium-class property was $250,393, a decrease of 7.5 per cent over December 2014. The year-to-date numbers for the average residential sale price in 2015 was $391,940, an increase of 1.9 per cent over 2014. While the average condominium sale price was $259,691, a decrease of 1.5 per cent over 2014. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

“A trend all year long, the hottest segments of our market are properties sold in the $300,000 to $400,000 price range, with 31.6 per cent of the year’s sales, followed by the $200,000 to $300,000 range, with 26.2 per cent of the year’s sales” says Silva. “In addition to residential and condominium sales, OREB Members assisted clients with renting 181 properties in December, and over 3,000 properties this year.”

Source: Ottawa Real Estate Board

 

Government tightens mortgage rules on homes over $500K

Liberal election platform expressed concern over ‘escalating home prices in high-priced markets’

Ottawa, December 11, 2015 – The federal government is boosting the minimum down payment for higher-priced homes in Canada effective in the new year.

Homebuyers are currently required to put down a minimum of five per cent to qualify for Canada Mortgage and Housing Corporation insurance — protection that lenders insist on when providing a mortgage worth more than 80 per cent of the home’s value.

Starting in February, CMHC will require a 10 per cent down payment on the portion of any mortgage it insures over $500,000. The five per cent rule remains the same for the portion up to $500,000.

“We recognize that, specifically in the Toronto and Vancouver markets, we have seen house prices that have been elevated,” Finance Minister Bill Morneau told reporters on Friday, “and we want to make sure we create an environment that protects the people buying homes so they have sufficient equity in their home.”

Once the new rules are implemented in 2016, someone looking to buy a $750,000 home would need to have a minimum down payment of $50,000, which is what you get when you add five per cent of $500,000 and 10 per cent of the remaining $250,000.

Banks are forbidden to provide “high-ratio” mortgages — when the amount being borrowed is more than 80 per cent of the home’s purchase price — without taking out insurance for it.

$500K downpayment graphic

Source: CBC News

 

Mild weather and post-election enthusiasm spurs on homebuyers

Ottawa, December 3, 2015 – Members of the Ottawa Real Estate Board sold 990 residential properties in November through the Board’s Multiple Listing Service® System, compared with 891 in November 2014, an increase of 11.1 per cent. The five-year average for November sales is 944.

“Mild temperatures in November, combined with increased activity post-election, were key factors in the Ottawa resale market performing exceptionally well in November,” says David Oikle, President of the Ottawa Real Estate Board. “The positive increase in condo sales may be explained by buyers moving to Ottawa to accept positions with the new government. There may have also been some pent up demand of people who chose to sit on the sidelines until after the election was over.”

November’s sales included 199 in the condominium property class, and 791 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“The condo market has picked back up over the past few months – a very positive change from the first half of the year, and now year-to-date condo sales have surpassed the numbers of units sold in 2014,” says Oikle. “Inventory levels are balancing out, cumulative days on market increased to 104 days, and average residential sale prices remain steady. This is very typical of a market that’s heading into the winter season.”

The average sale price of a residential-class property sold in November in the Ottawa area was $380,761, a decrease of 0.4 per cent over November 2014. The average sale price for a condominium-class property was $275,332, an increase of 9.9 per cent over November 2014. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

“The highest concentration of properties sold remains in the $300,000 to $400,000 price range, followed very closely – behind by only 26 properties – the $200,000 to $300,000 range,” says Oikle. “In addition to residential and condominium sales, OREB members assisted clients with renting 247 properties in November, and over 2,800 since the beginning of the year.”

Source: Ottawa Real Estate Board

 

No Ontario communities outside Toronto to have land transfer tax

Toronto – December 01, 2015 – The 444 municipalities across Ontario will not be given the same power as the city of Toronto to impose a land transfer tax.

Municipal Affairs Minister Ted McMeekin says he consulted a wide range of groups following last year’s local elections and found there was no call for a municipal land transfer tax.

He says local governments are looking for new revenue tools, but adds there will be no extension of a land transfer tax to any municipality beyond Toronto.

The Progressive Conservatives celebrated in the legislature after McMeekin’s surprise announcement during question period.

Deputy PC leader Steve Clark had campaigned hard against giving cities and towns the ability to create a land transfer tax, which he warned would hit home buyers with a bill averaging an extra $10,000 on closing.

The Ontario Real Estate Association and several mayors also had warned the province that a land transfer tax would hurt home sales and the economy.

Source: The Canadian Press

 

Canada adds 12,000 jobs in September, but unemployment rate ticks up to 7.1%

Ottawa, October 9, 2015 – The economy added 12,000 net new jobs in September, but the unemployment rate climbed by one-tenth of a percentage point to 7.1 per cent as more people entered the labour force, Statistics Canada said Friday.

The gain in the overall number of jobs came due to a gain in part-time employment, offset by a drop in full-time jobs.

The number of part-time jobs increased by 74,000 in September, but full-time employment fell by 62,000.

The September jobs report was the last major piece of economic data before the federal election on Oct. 19.

The Bank of Canada has cut its key interest rate twice this year in a bid to help an economy which contracted in the first half of the year due in large part to the drop in oil prices.

BMO chief economist Doug Porter called it an odd jobs report.

“While no doubt it is significantly weaker than the decent headline result would suggest, it’s also probably not as bad as the steep drop in full-time jobs would indicate,” Porter said.

“The plunge in education employment looks plain weird, and is likely to partly reverse next month.  Probably the single truest measure in this report is the slow upward grind in the unemployment rate.”

jobs-numbers

Source: Ottawa Citizen

 

Best September on record for number of Ottawa resales

Ottawa, October 5, 2015 – Members of the Ottawa Real Estate Board sold 1,244 residential properties in September through the Board’s Multiple Listing Service® System, compared with 1,131 in September 2014, an increase of 10 per cent. The five-year average for September sales is 1,137.

“Ottawa Real Estate Board members continued their active summer into a busy fall,” says David Oikle, President of the Ottawa Real Estate Board. “In fact this September marks the best September on record for the number of units sold in the Ottawa resale market. There was a possibility that the federal election campaign might affect the local real estate market, but this does not appear to have been the case thus far.”

September’s sales included 221 in the condominium property class, and 1,023 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“Inventory levels continued to decline; by over 4 per cent since last month, bringing the Ottawa resale market into balanced territory,” says Oikle. “Cumulative days on market increased slightly to 93 days, up from 89 days in August. In addition, the average sale price remains steady.”

The average sale price of a residential-class property sold in September in the Ottawa area was $385,142, an increase of 0.5 per cent over September 2014. The average sale price for a condominium-class property was $257,303, an increase of 1.3 per cent over September 2014. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

“The highest concentration of properties sold continues to be in the $300,000 to $400,000 price range, followed closely, again, by the $200,000 to $300,000 range,” says Oikle. “In addition to residential and condominium sales, OREB members assisted clients with renting 250 properties in September, and over 2,300 since the beginning of the year.”

Source: Ottawa Real Estate Board

Ottawa housing construction heats up in August, driven by single detached and row starts: CMHC

Ottawa, September 9, 2015 – Housing starts trended up in the capital in August, the Canada Mortgage and Housing Corporation said Wednesday.

At 4,943, housing starts were up 442 units from July, the corporation said.

CMHC’s principal market analyst for Ottawa, Jean-Sébastien Michel, said the August increase was driven by increases in single detached and row starts.“The greater demand for new single-detached homes is likely the result of strengthening full-time employment since the beginning of the year,” Mr. Michel said in a statement. “Relatively high levels of unabsorbed condominium apartments have allowed builders to respond to the increased demand by launching more single-detached projects.”The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts, used to account for considerable swings in monthly estimates.The SAAR of 5,055 for August was also up from July, as the increase in single detached and row starts more than made up for a decrease in apartment starts.Nepean, outside the Greenbelt, accounted for 20 per cent of the August starts overall, followed closely by Kanata and Gloucester, each with 18 per cent. Cumberland had the most single detached starts at 25 per cent.Construction heated up across the country too, driven by a 19.5 per cent increase in urban multi-unit projects – primarily in Ontario.CMHC says the annualized pace of housing starts in August increased to 216,924 units nationally, including 142,927 units in urban multi-unit projects.That compares with 293,253 units started in July overall, including 119,478 urban multi-unit projects.On a seasonally adjusted basis, there were 58,385 single-detached housing units started last month, up 1.4 per cent.

CMHC says the pace of urban housing starts declined in most regions of the country, with Ontario being the main exception. Prince Edward Island also had an increase to 423 units from 255 in July.

In Calgary, there was more construction of all types of dwelling in August than in July but less than the same month last year, prior to the collapse of oil prices in late 2014. In Edmonton, there were declines from both July and August 2014.

In British Columbia, seasonally adjusted starts declined to 26,349 units in August from 36,510 units in July. In Vancouver, there was a decline to 16,729 units in August, down from 27,317 in July when there was an unusually high number of housing starts.

In Montreal, the August seasonally adjusted rate fell to 13,582 units in August from 25,670 in July. In St. John’s, NL, the rate fell to 969 units from 1,177 in July. In Halifax, there were 2,229 units started in August, down from 4,698 in July.

CMHC notes that month-over-month comparisons can be highly variable, particularly with multiple-unit projects. It considers the six-month trend to be more indicative.

In August, the national six-month trend indicated Canada was on pace to start 196,565 units of housing in 2015 – compared with the July measure of 185,642.

“Housing starts have been trending up, supported by strong condominium activity in Toronto,” CMHC chief economics Bob Dugan said in a statement.

“While national starts have increased, housing construction has started to slow in Alberta and Saskatchewan as a result of weakening economic conditions related to the decline of oil prices.”

A separate report released Wednesday by Statistics Canada says building permits issued for residential construction rose 8.7 per cent to $5.0 billion in July, following a 16.7 per cent increase the previous month. Gains were registered in four provinces, led by Ontario and British Columbia.

Including non-resident constructions, the value of building permits issued by Canadian municipalities edged down 0.6 per cent to $7.7 billion in July, following a 15.5 per cent increase in June. Lower construction intentions in the Ontario’s and Alberta’s’ non-residential sector, accounted for much of the decrease at the national level, Statistics Canada said.

Source: Ottawa Business Journal- with files from the Canadian Press

Bank of Canada holds rates steady as signs of recovery emerge

September 9, 2015 – The Bank of Canada kept its key interest rate unchanged and said a weaker currency and household spending are leading a recovery from the shock of lower oil prices.
Policy makers kept the benchmark rate on overnight loans between commercial banks at 0.5 per cent, in a decision released Wednesday in Ottawa, after cutting it twice this year in January and July. Twenty-three of 24 economists predicted no move, and one called for a quarter-point cut.
After Canada’s economy contracted in the first two quarters of this year, meeting the textbook definition of a technical recession, evidence the worst is over has started trickling in for the Group of Seven’s biggest oil exporter. Signs of recovery include the biggest two-month gain in exports since 2011 and creation of 193,300 jobs in the 12 months through August, defying the normal pattern of a recession.

“Economic activity continues to be underpinned by solid household spending and a firm recovery in the United States,” policy makers led by Governor Stephen Poloz said in a statement. “Canada’s resource sector continues to adjust to lower prices for oil and other commodities, with some spillover to the rest of the economy,” adjustments it expects will take “considerable time.”

The decision will be parsed by political leaders amid a tight election campaign focused on the economy. Prime Minister Stephen Harper has said the economy “is back on track” and credited his move to balanced budgets. Tom Mulcair’s leftist New Democrats and Justin Trudeau’s centrist Liberals, who polls suggest could defeat the incumbent Conservatives in the Oct. 19 election, are attacking Harper’s economic stewardship.

Canada’s lower dollar is helping the world’s 11th largest economy adjust to the drop in commodity prices, and to more recent questions about the global economy linked to signs of slower growth in China, the central bank said. “While the overall export picture is still uncertain, the latest data confirm that exchange rate-sensitive exports are regaining momentum.”

The Canadian dollar fell to the lowest since 2004 last month and was near that mark Tuesday at about $1.32 per U.S. dollar. That comes as the economy in the U.S. – which buys three-quarters of Canada’s exports – is strengthening enough for Federal Reserve officials to signal they will raise interest rates for the first time since 2006.

The bank said Wednesday that economic growth and inflation appear to moving in line with its July forecast. At that time policy makers called for 1.5 per cent annualized growth in the third quarter.

Important drags remain on Canada’s recovery. Oil prices fell below $40 a barrel last month, consumer spending may be limited by high debt loads, some governments are curbing spending and exports have suffered from years of weak global demand.
Source: Globe and Mail

Strong summer performance for Ottawa’s resale market

Ottawa, September 3, 2015 – Members of the Ottawa Real Estate Board sold 1,279 residential properties in August through the Board’s Multiple Listing Service® System, compared with 1,200 in August 2014, an increase of 6.6 per cent. The five-year average for August sales is 1,234.

“Ottawa Real Estate Board members had a busy August, with units sold coming in higher than the five-year average and a healthy increase from last year’s sales,” says David Oikle, President of the Ottawa Real Estate Board. “In addition to an increase in units sold, inventory levels of residential and condominium properties dropped by 5.3 per cent since last month, and cumulative days on the market was an average of 89 days.”

August’s sales included 259 in the condominium property class, and 1,020 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

The average sale price of a residential-class property sold in August in the Ottawa area was $379,946, a decrease of 0.1 per cent over August 2014. The average sale price for a condominium-class property was $244,801, a decrease of 7.3 per cent over August 2014. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

“It is important to note that the increase in units sold is for both residential and condominium properties,” says Oikle. “Also, we continue to see an increase in the number of condominium units sold in comparison to 2014, and the year-to-date condominium sales are now close to on par with last year.”

“The majority of buyers in Ottawa continue to buy properties in the $300,000 to $400,000 price range, closely followed by the $200,000 to $300,000 range,” says Oikle. “In addition to residential and condominium sales, OREB members assisted clients with renting 295 properties in August, and over 2,000 since the beginning of the year.”

Source: Ottawa Real Estate Board

Ottawa apartment starts to drop in 2016: Conference Board of Canada

Ottawa, September 2, 2015 – Apartment starts in Ottawa in 2016 are expected to fall below 1,000 units for the first time in six years, according to a Conference Board of Canada report released Wednesday.

The board’s Summer 2015 Metropolitan Condo Outlook is predicting the decline, despite forecasting slightly better economic growth and job creation prospects over the next year.

“Resale transactions are expected to rise by a modest 2.5 per cent in 2016, with prices up a relatively understated 1.3 per cent,” it said.The report, released by mortgage insurance firm Genworth Canada, said sluggish national GDP and job growth across the country will have a “moderating effect” on the national condo market.“The report findings continue to align with what we have described as a soft landing for Canada’s condo market for 2015,” Genworth Canada president and CEO Stuart Levings said in a statement. “While conditions vary across markets, with greater cooling in oil-exposed regions, overall, the numbers point towards balanced resale activity which will support the safety and soundness of the condo market.”Robin Wiebe, a senior economist with the conference board, said national house prices have been driven upward largely by single- and semi-detached homes and row units in Toronto and Vancouver.“Price increases for apartments have been much less frothy,” Mr. Wiebe said in a statement. “Accordingly, nowhere do we see significant overvaluation of condo prices.”Source: Ottawa Business Journal