The scorching hot Ottawa real estate market is cooling due to increased interest rates, according to one veteran realtor.
“We’re seeing sales are down across Ottawa 25 per cent,” Marnie Bennett from Bennett Property Shop Realty told CTV News at Noon. “April certainly has been slow compared to normal and we’ll just see how it plays out.”
Bennett says record prices will hold though due to the shortage of housing and the demand.
“Prices are not going to go down but they’re not going to escalate like we’ve been seeing in the past at 27 per cent. We’re likely going to go back to more normal times, maybe nine or ten per cent. … It won’t be the crazy circus that we’ve had.”
Bennett says that circus environment has led to pervasive myths in the real estate market. These seven are the most common she says she hears regularly.
Seller myth #1: Sellers believe no preparation is needed in today’s market
“A lot of sellers think ‘My home will sell, who cares if it’s dirty or messy or falling apart?’ That’s not what’s going on. You should always have your home looking professional.
“You’re going to get 30 per cent less if your house is messy and dirty and not well cared for.”
Seller myth #2: There’s no such thing as a crazy price for my home
“In today’s market pricing a home five to 10 per cent below market value creates excitement in the market place.
“Along with not properly preparing a home for sale, sellers think they can defy the odds of selling and set an overly ambitious asking price. Nothing could be further from the truth.
“Buyer audience in this market will react very quickly if a home is way overpriced. There will be no showings, no offers.
“When a home lingers on market then a stigma is created. A price reduction raises eyebrows of other buyers and sends a desperate signal.”
Seller myth #3: Selling “as is” is easy
“Sellers who want to sell ‘as is’ with unfinished projects or home systems that are not updated i.e. broken A/C, a leaking roof, water damage, electrical issues. This can all be a dealbreaker for buyers and attract low, low bids.”
Seller myth #4: Buyers must waive conditions
“Buyers have different risk tolerances. It’s the single largest transaction of their lives. They have a ton of anxiety already. Buyers want to have at least an inspection.”
Buyer myth #1: Buyers say ‘I will wait until prices fall or the market crashes’
“Buyers waiting for a crash is like banking on winning the lottery for retirement.
“Meantime prices are up 57% or more in the last two years.
“Interest rates up nearly two per cent in the last year – which means less buying power. A one per cent increase reduces buying power by 10 per cent.
“This is not the U.S. There won’t be a crash. We have one of the best banking systems in the world.”
Buyer myth #2: Buyers believe they should work directly with the listing agent
“The worst mistake a buyer can make is working with the listing agent.
“In fact the government does not support this and discourages realtors from doing this.
“Buyers’ interests and legal rights are not being protected. The listing agent works directly for the seller. Is paid by the seller.
“It’s a total conflict of interest – seller agent is obliged legally to tell the seller everything that the buyer has said.”
Buyer myth #3: Buyers believe it’s better to buy through a private sale
“Sellers are savvy today. They don’t have to follow real estate law and could hide things from you. They are not obliged to tell you. Buyer beware!
Bennett says the real estate market shifts and changes.
“We are in a shift now. Listings are up 105% since last year.”
“With each shift or cycle there are different challenges and myths.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
