Patrick Morris noted that Ottawa’s real estate market is likely to remain steady in 2016. “Similar to the CMHC forecast, we expect prices to go up slightly, between one and two per cent for this year. We don’t see a drop in the number of sales, which is a good sign. I think with the new government in place, there seems to be some new excitement, at least in the Ottawa housing market, which hopefully will translate into some good activity.”
December 2015 proved to be a bumper month for combined residential and condo sales. Members of the Ottawa Real Estate Board sold 703 properties through the Board’s Multiple Listing Service in December 2015, besting the December 2014 total of 638 sales by 10.2 per cent. Over the past five years, only December 2011 sales came close, with 699 combined residential and condo sales.
The average sale price for a residential property rose 1.9 per cent from 2014 to 2015, from $384,809 to $391,940. The real estate 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.”
On another positive note, December 2015 saw the number of condo sales increase 11.9 per cent over December 2014’s total. “This is a move in the right direction,” says Patrick.
He notes, however, that the inventory of condos for sale in Ottawa remains high; as such, it is taking longer for them to sell. The cumulative days on market for condos last year was 103 days, up 15.7 per cent over 2014. “There is so much inventory, it’s almost making it more complicated for buyers to determine what they want,” observes Patrick. “Some of them say to me, ‘Pat, should I buy brand new or should I buy resale?’ With resale units,
you know what you’re getting. With brand new units, you have the advantage of things being new, but new condos typically have smaller bedrooms, the cost per square foot is high, and indoor parking spots usually cost extra.”
The cumulative days on market also rose for residential properties overall last year, increasing to 83 days from 78 days on average in 2014.
“Inventory levels for both residential and condominium properties are high,” explains Patrick, “and they are likely to continue to remain high between now and the end of 2018, which means there is a great selection for buyers.”
The most popular price range for residential properties in 2015 was between $300,000 and $400,000, accounting for 35.4 per cent of the year’s sales. Houses between $200,000 and $300,000 made up 21.9 per cent of 2015 sales. Houses between $500,000 and $750,000 accounted for 1,692 sales last year, or 14.1 per cent of the total residential properties sold, while those over $1 million made up just 1.1 per cent.
“Properties listed over $1 million in Ottawa have a huge supply of 152 residential homes,” says Patrick, noting that December’s absorption rate was 21.7, which means it would take 21.7 months to sell the 152 listings based on the current rate of sales per month. “This high rate is not unusual, because there are only a few buyers who qualify to purchase a $1 million-plus property in Ottawa. The supply in this upper price range is very high and the demand is usually the lowest.”
More than half of the condos sold in 2015 were in the $150,000 to $250,000 price range. The average condo price fell slightly year on year, from $263,543 in 2014 to $259,691, a decrease of 1.5%. “This was in keeping with many forecasts,” Patrick observes.
“Unlike the Toronto and Vancouver housing markets, bidding wars have been uncommon in Ottawa since 2011. Barring any unforeseen geopolitical events or unexpected economic issues, Ottawa should have a steady and stable housing market in 2016,” says Patrick.