Shrinking inventory levels and strong employment rates creating confidence and demand
OTTAWA, Oct. 13, 2016 /CNW/ - The aggregate1 price of a home in Ottawa rose 3.6 per cent year-over-year to $411,654 in the third quarter of 2016, according to the Royal LePage House Price Survey2 released today.
When broken out by housing type, the median price of a two-storey home increased 3.8 percent year-over-year to $429,788. During the same period, the median price for a bungalow rose 4.2 per cent to $402,844. Condominium prices increased a modest 1.0 per cent year-over-year to $313,612.
"The Ottawa market is benefiting from increased buyer confidence given the strong employment numbers, limited inventory and low interest rates," said John Rogan, broker of record, Royal LePage Performance Realty. "People who came to Ottawa to fill roles in the new government are settled now so our inventory levels are down, driving buyers to come out in droves to compete for available listings."
"We anticipate Ottawa's balanced market to become even more of a buyer's market moving into the fall as inventory levels out," added Rogan.
Nationally, Canada's residential real estate market continued to grow in the third quarter of 2016, posting a 12.0 per cent year-over-year aggregate house price increase to $545,414. The price of a two-storey home rose 13.7 per cent year-over-year to $649,635, and the price of a bungalow increased 11.0 per cent to $459,481. During the same period, the price of a condominium increased 5.8 per cent to $360,679.
"Across Canada, our real estate markets remain healthy, with home values showing modest to strong (yet rational) price appreciation in almost every Canadian city," said Phil Soper, president and chief executive officer, Royal LePage. "Even in the hardest hit oil patch regions, prices have held up well, with small single-digit declines, year-over-year."
On October 3, 2016, Federal Finance Minister Bill Morneau announced new measures specifically designed to cool the country's housing market and curtail foreign buying activity. These measures are meant to bring consistency to mortgage insurance rules by standardizing eligibility for high- and low-ratio insured mortgages, expanding stress tests, and improving tax fairness by removing the ability of non-residents to claim capital gain exemptions, which are only applicable to properties identified as principal residences.
"Consumer confidence suffered a direct hit when the federal government introduced new, more restrictive regulations in early October," said Soper. "While it is too early to say definitively, it appears Canadian homebuyers are adjusting quickly, and that fears of a hard correction were unwarranted. While the changes are significant, major lenders may already be using similar criteria when writing mortgages in sensitive regions like Alberta and B.C., so the additional drag on the market resulting from the new legislation won't be as great as it appears on the surface."
About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation's largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, Brookfield RPS, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of over 17,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's and children's shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbolTSX:BRE.
For more information visit: www.royallepage.ca.
Aggregate prices are calculated via a weighted average of the median values of homes for reported property types in the regions surveyed
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SOURCE Royal LePage Real Estate Services
Image with caption: "Ottawa Home Prices Show Steady Growth in the Third Quarter of 2016 (CNW Group/Royal LePage Real Estate Services)". Image available at: http://photos.newswire.ca/images/download/20161013_C8573_PHOTO_EN_794979.jpg
For further information: Michael Jesus, Kaiser Lachance Communications, 647-725-2520 ext. 234, [email protected]