The 2016 Ottawa Real Estate Market — Year-In-Review

What a remarkable, record-breaking year for the Ottawa real estate market in 2016! Here is a summary of the key factors that contributed to the market’s record year:

The Growing Resale Market

• Single detached-homes drove the resale market with a 5.7 per cent sales increase over 2015.
• Sales of residential homes and condominium units generated the highest increase in resale units sold in the last twenty years.

Increased Buyer Demand in Residential Homes

• Record residential home sales occurred mostly from April to October.
• Most of the buyer demand was in residential homes priced in the $200,000 to $299,999 and $300,000 to $399,999 price ranges, which accounted for 54.6 per cent of the residential market.
• The following residential property types that were popular among buyers were:
  – 2-storey homes with an average sale price of $417,920 (up 3.3 per cent over 2015);
  – 3-storey homes with an average sale price of $509,425 (up 3.6 per cent over 2015);
  – bungalows with an average sale price of $364,851 (up 2.1 per cent over 2015), and
  – hi-ranch homes with an average sale price of $317,671 (up 0.7 per cent over 2015).
• The increased buyer demand for residential homes increased the average residential sale price to $397,777, an 1.5 per cent increase over 2015.
• Much of the buyer demand is attributed to Ottawa’s stable employment growth, particularly in the ongoing hiring of federal public sector workers; low mortgage rates; gradual growth of the hi-tech sector, and increased ongoing public optimism and consumer confidence in the Ottawa economy after the election of the new Liberal majority government in 2015.

Strong Condo Market (at the end of the year)

• Despite a high number of unsold condominium units in the market throughout the year, there were record sales in November and December.
• Most of the trading activity in the condominium market was in the $150,000 to $249,999 price range, which accounted for 55.4 per cent of the condo market. This signalled the importance of home affordability among buyers.
• The following condominium property types that were popular among buyers were:
  – 2-storey row-unit homes with an average sale price of $210,761 (down 2.7 per cent under 2015);
  – 2-storey stacked homes with an average sale price of $221,436 (down 3.9 per cent under 2015), and
  – 3-storey row-unit homes with an average sale price of $282,145 (up 4.8 per cent over 2015).
• The average condominium sale price remained relatively stable at $260,982, an 0.4 per cent increase over 2015.

Increase in Total Number of Units Sold

• There were 15,537 residential and condominium units sold, which represented a 6 per cent increase over 2015 and the highest increase in the last twelve years.

Looking Ahead in 2017

The Canadian Mortgage & Housing Corporation (CMHC) projects that if the increased number of unsold condominium units continues in the Ottawa market, the housing market will underperform than in 2016. As well, many buyers, especially first-time home buyers, will continue to be discouraged to buy the existing inventory and venture otherwise into rental apartments because of affordability (e.g. high condo fees and prices etc.).

In the area of employment, CHMC forecasted Ottawa to have steady job growth in 2017 creating 542,000 jobs compared to approximately 543,000 jobs generated in 2016. This provides some encouraging news on the ongoing stability of the economy and the housing market where increased buyer demand, coupled with low mortgage rates (if stable), for resale homes and single-family detached homes may continue.

After examining the current home inventory numbers from the Ottawa Real Estate Board, it is estimated that approximately 10,000 homes will be listed for sale in the Ottawa market in May 2017. If you are considering selling your home this year, it is a good time to prepare to get your home listed in the market before May for it to be sold quickly to the right buyer at the highest possible price. When you put your home for sale, you are competing against other homes on the market in your neighbourhood. This what happens traditionally at the beginning of May where there will be many buyers looking for listed homes that offer them comfort, convenience and value. Conversely, when you list your home in the market (before May), with proven pricing, marketing and preparation strategies, you will be able to beat your competition by attracting the appropriate qualified buyer who will be willing to pay top dollar for your home. You don’t want to miss this opportunity!

You can contact me on how I can help you prepare your housing plans. I would be happy to discuss your specific buying or selling situation.