The number of house sales, along with property property prices, soared in the National Capital Region last year and isn’t showing any signs of slowing down.
The trend looks set to continue in 2020, but comes at a time when the region is grappling with a lack of affordable housing.
“Each quarter, the properties have increased in value,” said Angelo Toscano, a real estate agent based in Orléans.
One of the biggest factors driving the increase is market demand.
“We started the year fairly stable. We were looking at about three buyers for each property. Now we have eight buyers per property,” said Toscano.
This demand often results in bidding wars between buyers, with the winner often paying above the list price.
Real estate agent Angelo Toscano said that high demand for Ottawa houses often leads to bidding wars. (Radio-Canada)
A similar trend is also happening in Gatineau, Que., according to the Canadian Mortgage and Housing Corporation (CMHC).
Last year was the fifth straight year that sales grew in the city, according to Lukas Jasmin-Tucci, a spokesperson for the corporation.
The forecast for 2020 is similar, with prices expected to increase 10 to 12 per cent, he said.
That’s putting strain on first-time home buyers who can find themselves priced out of the market.
Young people are less likely to enter the real estate market these days, according to the CMHC. Instead, many of them continue renting.
As real estate continues to become more expensive, this trend will continue, said Jasmin-Tucci.
Affordable housing shortage
While the real estate market is going strong, the region is also struggling with a lack of affordable housing.
Many organizations have been sounding the alarm for months. The CMHC estimates that Ottawa’s rental housing vacancy rate was at 1.6 per cent in 2018, the last year for which there is data.
Across the Ottawa River, the vacancy rate in Gatineau, Que., sits at 1.2 per cent, the lowest in the province. The Quebec government has put in place an emergency assistance program to help people who are homeless, as well as to assist cities that are coping with a housing shortage.
House prices are expected to jump between 10 and 12 per cent in 2020. (Trevor Pritchard/CBC)
While the price of homes in the region continues to grow, advocacy groups persist in their push for investments in affordable housing.
There are approximately 10,000 people on the waiting list for social housing in Ottawa, according to data from the City of Ottawa.
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.
