Boosted by Strong Condo Sales, Ottawa Market Glides Into 2019 on Sure Footing, Looks Set to Stay Busy

The Ottawa real estate market rang in the New Year with strong demand for properties and a short supply, a factor that will continue to move prices higher and keep the market humming after a stellar 2018.

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It should be another busy year for the Ottawa real estate market,” says Patrick Morris. “The city continues to enjoy steady growth, interest rates remain attractive, and the region’s unemployment is low, with the primary employers (government and high-tech) on solid footing.”

Last year, members of the Ottawa Real Estate Board sold 17,476 residential and condo properties, increasing sales by 2.4 per cent over 2017, when they sold 17,065 homes.

“The condo market was the bright star in Ottawa in 2018, capitalizing on the high demand for properties that couldn’t be met in the residen­tial sector,” says Patrick, noting that the number of condo sales last year increased 13.1 per cent over 2017, with 4,058 units sold in 2018 versus 3,587 sold in 2017.

“Overall, the residential sector of Ottawa’s real estate market was strong last year, despite the low inventory of properties for sale,” adds Patrick. “The number of sales in 2018 decreased slightly by 0.4 per cent from 2017. It would have eclipsed 2017’s production had it not been for sluggish sales numbers in November and December.” Two main issues accounted for the decline in sales at year end: early winter weather that was unfavourable for Ottawa buyers, and the low inventory of properties.

Rob Kearns of The Morris Home Team adds, “Prices will continue to move higher because of the upward pressure caused by this low inventory and high demand. You may see this levelling off in the summer, with a return to a more balanced market in the last half of 2019.”Chart_for_2018_Stats.JPG

The mortgage stress test intro­duced at the start of last year by the federal government to cool off major markets such as Toronto and Vancouver has had an effect on the Ottawa real estate market, par­ticularly in some neighbourhoods. As Ralph Shaw, President of the Ottawa Real Estate Board, noted, “It has also unfortunately made move-up buyers less likely to take that step and free up entry-level options, which is an important part of the resale market.”

First-time buyers might have to look for affordable housing options outside the Greenbelt. That said, Kearns encourages prospective first-time buyers to get on the property ladder: “Just get into the market. If you look back, people who’ve waited to get in continually pay more and more. If it’s about home ownership, then it’s more than just an invest­ment. It’s better to get in sooner rather than later. Prices are sticky in Ottawa—they won’t come down at the same speed they went up.”

The $300,000 to $449,000 price range was the most active for residential home sales in 2018, accounting for about 45 per cent. The average sale price rose just over 5 per cent from 2017 to 2018, rising to $446,661 by the end of last year. The real estate board cautions that average sale price can be useful to look at overall trends but should not be used to establish whether specific properties have gone up or down in value—that all depends on prices and conditions within neighbour­hoods, and can vary even from block to block.

Within the condo market, half of units sold were between $175,000 and $274,999. Although the number of condo sales in 2018 went up considerably over the previous year, the average sale price of condos experienced a more modest 3.2 per cent increase, to $278,316.

All signs point to another good year for Ottawa’s real estate market, given continually low interest rates, healthy employment figures, and developments such as the LRT.

MARKET SAVVY: How to tell the age of a home

There are many reasons why knowing the age of a home and its components (e.g., furnaces and windows) can be helpful, including assessing structural safety and energy efficiency. Here are a few techniques to figure out the approximate age of a house if you don’t know when it was built.

Mid_century_home.jpgThe foundation’s the thing. Stone foundations were used extensively from the 1800s until around 1930. Brick foundation walls were in style from 1910 until the 1930s, while rubble foundations (the first generation of poured concrete) were used during the 1920s and 1930s. Apart from custom-built homes, most houses from the 1940s to mid-1960s have concrete block foundations. Since 1970, house foundations have been built with poured concrete almost exclusively. Each type of foundation has strengths and weaknesses; make sure you are familiar with how these relate to your home.

Check underfoot. Houses built before the mid-1960s typically had plank subflooring, whereas plywood was used from the mid-1960s until the early 1980s. After that, wafer board became the material of choice to decrease construction costs.

If the walls could talk… Houses built before 1960 had plaster walls and ceilings; today, new houses are built with drywall.

How is it wired? Aluminum wiring was used residentially starting in 1965. At that time, the cost of copper was high by comparison, due in part to the Vietnam War effort. Sufficient bad press about aluminum wiring led to a halt in its use in the mid-1970s. In the present day, aluminum wiring has affected the insurability of some homes.

Check the plumbing. From 1920 to 1950, water supply plumbing was often made of galvanized steel. Since then, copper has been the number one material, although home builders have recently started using PVC plastic. Waste plumbing was made from cast iron until around 1960, when copper was used for a short time (it was too expensive to keep using). PVC plastic is now the predominant material used.

Rails and ducts offer hints. Some homes built just after the Second World War have railway rails in the basement used as support beams; Ottawa was once an industrial city and had many old rails and ties. Houses built during the WWII era used tin for ductwork because it was cheaper than using steel, which was needed for munitions. Tin ductwork is typically shinier than steel.

Look at the bricks. Some brick homes can be dated by type of brick. For example, the salmon-coloured Glebe brick was manufactured and used on homes built in the 1920s. This particular brick was produced in Ottawa, in the area now occupied by Billings Bridge Shopping Centre.

How old is the furnace? You can check the month, date, and year of manufacture; this is usually stamped on the blower fan inside the furnace, by the filter. You just have to make sure this part is the original to the furnace! As for the oil tank, most recent furnaces will have a plaque with the date welded on the tank. This date is required by most insurance companies.

Investigate outdoor features. Manhole covers, sidewalks and curbs in newer subdivisions often have dates on them.

Is this the original? Features such as porcelain plumbing fixtures and thermal pane windows typically indicate their date of manufacture, but it’s important to know if they are the originals or the replacements.

MORRIS HOME TEAM WINS TOP ROYAL LEPAGE AWARD

We are thrilled to receive, for the 19th year in a row, the National Chairman’s Club Award for 2018, which recognizes the top one per cent from among 18,000 realtors across Royal LePage Canada! A huge and special thank you to our clients, who have supported us all year long!