Ottawa’s 2017 resale market finished out the year in robust fashion, with condominiums the driving force in December as they had been for much of the year.
Condo sales in December jumped 25 per cent over the same month in 2016, while other properties increased 3.5 per cent, according to the Ottawa Real Estate Board (OREB). That made for a total of 771 homes sold in December through the board’s Multiple Listing Service System (MLS) compared to 711 the previous year. The five-year average for the month is 687.
“This could very well be attributed to the changes in the mortgage qualification rules implemented Jan. 1, 2018,” said Ralph Shaw, 2018 president of OREB, in a statement.
Shaw was referring to the new mortgage “stress test” that requires buyers with a down payment of more than 20 per cent having to prove they could still afford their mortgage payments if interest rates increase by two percentage points. Many had been speculating that buyers would snap up homes before the new rules came into effect, resulting in a sales spike.
A good year
Ottawa’s 2017 resale market saw total sales of 17,083 homes in Ottawa through MLS. That was up 10 per cent over 2016, when 15,526 homes were sold. Condo sales for the year increased by over 22 per cent while other properties jumped over seven per cent.
Shaw called 2017 “another solid year” for the Ottawa housing market, and underscored the rebound in the condo market after several years of sluggish performance. However, he acknowledged that inventory was low all year and new listings declined each month in 2017.
The average condo price last year was $269,903, while other properties weighed in at $425,063. Those prices were up 3.4 and 6.8 per cent respectively over 2016.
Looking ahead
Shaw said that OREB will monitor the impact of the new, stricter mortgage rules, which he called “poorly conceived” legislation.
However, he also said that with an average price point in the $400,000s, the Ottawa market will fare better than those in Vancouver and Toronto. That’s because buyers of more expensive homes will have more trouble proving they can meet the significantly higher payments if interest rates rise.
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