Ottawa’s real estate market typically slows down during the colder months of the year, and this year is shaping up to be no exception.
According to the Ottawa Real Estate Board (OREB) 724 homes were sold through the Multiple Listing Service (MLS) in November, representing a modest 1.6 per cent decline compared to the same time last year.
But home sales were 31.8 per cent below the five-year average and 27.4 per cent below the 10-year average for the month of November.
“I’ve been leading this team for about 10 years now, and I’ve never managed or lead a group of people who work so hard for so little. Sales are down, and when sales are down, so is the income of the average realtor,” said Bill Meyer who leads the Tulip Team at RE/MAX.
“We had some real special years during the height of the market during COVID, so when we compare it strictly to that, it’s a big difference. Sales are down probably about 12 per cent this year and about 20 per cent the year before in the number of homes selling.”
It’s a trend that is largely fuelled by the Bank of Canada’s interest rate of five per cent. The highest rate the country has seen in more than 20 years.
The central bank announced on Wednesday that it is holding its lending rate steady, at least for now.
“Buyers are just playing the waiting game to see when rates come down, how far they will come down,” said Meyer.
“It’s tough because what will probably happen is as rates come down, more buyers will come into the market and prices will start to go up. So it’s tough to play the waiting game.”
The average sale price for all homes in Ottawa during the month of November 2023 was $628,900. That’s an increase 1.4 per cent compared to the same time last year, but some communities and building types are seeing prices dip.
In Barrhaven, some new builds are now starting at $419,990.
“$400,000 is pretty cheap compared to the fact that we were almost at $600,000 last year when we signed so, that’s pretty good,” said Natascha Jansen-Poulin.
“I’m probably going to stay here for quite a while so it doesn’t really matter to me too much, but I do hope prices go up so that my value goes up as well.”
There are roughly 2,800 homes on the market in the capital as of the first week of December.
That level of supply is something realtors, homebuyers and sellers have not seen in the past few years, but it shouldn’t come as a surprise.
“Some people think ‘is that good or bad?’ In 2019, there were 4,000 homes on the market. So when people say ‘we have too much inventory’, compared to what; compared to the heated days of COVID when properties were selling in the first five to seven days? Yeah, there is a lot more inventory in the market than there was back then,” said Meyer.
“But generally speaking, we have about a four month supply on the market and that is a balanced market. We’re just not used to that over the last couple of years.”
Where home prices and sales go from there will largely depend on what the Bank of Canada has in store for the key lending rate. The next rate decision is scheduled for Jan. 24, 2024.
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.
