Rising Sales and Buyer Inquiries Signal a Brighter 2017 for Ottawa's Real Estate Market

Things are looking up for the Ottawa real estate market in 2017 after a steady but stagnant 2016. “It’s shaping up to be a much better year,” says Patrick Morris.

House_in_Early_Spring_Dreamstime.jpg“What we’re finding this winter so far is that we’re getting more inquiries on our listings than we had last year at this time. We’re moving in the right direction, so this is going to bode well for both sellers and buyers.”

Members of the Ottawa Real Estate Board sold 1,010 residential properties in February 2017 through the Board’s Multiple Listing Service, compared with 908 in February 2016, an increase of 11.2 per cent. The five-year average for February sales is 872. It’s important to note that all real estate is local, and conditions vary from neighbourhood to neighbourhood.

“In the balanced market that we have, there is a buyer for every listing out there, notes Patrick. “It’s just a matter of the sellers being patient to find that right buyer.” That’s because it’s taking a bit longer to sell properties. The cumulative days on market for residential homes was 86 days in 2016, a 26 per cent increase over 2015. Condos took 113 cumulative days to sell, a jump of 28 per cent compared to 2015. Prices were also stagnant in 2016, as had been expected.

On a positive note, the inventory of listings is declining in both the residential and condo markets, making the Ottawa housing market more balanced. As of February 28, 2017, there were 3,414 residential units for sale, a drop from 4,270 as of February 28, 2016. Condo inventory decreased to 1,287 units as of February 28 this year, down from 1,600 units at the same time last year.

“This is good for potential sellers, and it’s going to help buyers, too,” explains Patrick. “What we found over the last several years was that there was so much inventory on the market, buyers almost had too much choice. As the inventory decreases, it’s going to make buying decisions a lot quicker.”

REs_Condo_Sales_Jan_Feb.JPGMost house sales in February 2017 were in the $300,000 to $500,000 price range, in keeping with the trend for 2016. “About 80 per cent of Ottawa sales are under 500K,” says Patrick. “It’s one of those markets that’s great for mainstream buyers. The upper-end market for sellers has been a bit of a struggle, but it’s improving.” The condo market, which had been in the doldrums in 2016, also stands to benefit this year from a decline in inventory. The most popular condo price range was between $150,000 and $250,000, which accounted for 54.6 per cent of the sector’s sales.

Positively, observes Patrick, analysts are forecasting a continuing balanced market for 2017. “This makes for a healthier economy in Ottawa. There are many positive signs, such as the continuing LRT construction, increased migration, steady mortgage interest rates, low unemployment, and Canada’s 150th anniversary celebrations.” Major new projects slated in the next few years, such as the new Central Library and the Civic Hospital expansion, will also be good for the region. “All the elements are there for a much better year,” concludes Patrick.

Remodelling Cost versus Value 2017:

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COACH HOUSES: Are They a New Option for Urban Dwellers?

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Now that the City of Ottawa has approved the building of “coach houses”— small, detached secondary units located on lots with existing houses—homeowners have a new way of earning rental income or providing housing for parents or adult children. Since October last year, owners can add these freestanding structures to their lots without the need for rezoning; as long as owners meet certain criteria, such as lot size, they only need a city permit. Coach houses are a way for cities to gently intensify urban development and provide more affordable housing.

There are a few important considerations. Building costs run about $300 per square foot, so a coach house of 500 square feet would cost around $150,000 to build. Here’s the rub: any improvement to property is likely to increase property  taxes. Also, coach houses will only be possible for people with large backyards; it’s going to be difficult to build a coach house on a 50- by 100-foot lot or even a 60- by 100-foot lot. That said, a coach house will certainly be helpful to those with larger backyards. For more detailed information, visit Ottawa.ca/coachhouse.

Coach houses will be permitted:

  • On lots with single or semi-detached homes

  • On lots with townhouses if they are on a corner or have a back lane

  • If smaller than the main house (up to 40 per cent of the footprint of the existing home) 

  • If on the same lot (can’t be severed)

  • On city water/sewer

  • When at least 60 per cent of the backyard stays open

  • When they are only one-storey high (except for in rural situations)

  • When they are serviced by the main dwelling

  • When they don’t create a new driveway 

Need help selling your home or finding the perfect house? Call or email us. You can rely on our intimate market knowledge and professional service. Let us help you. 613-238-2801 mail@morrishometeam.com