Ottawa home sales hit record high

7 01 2010

By Robert Bostelaar, The Ottawa Citizen January 7, 2010

 One year ago, home sales in Ottawa seemed headed for a chilly stretch. But bargain mortgage rates and a rising consumer confidence that took hold in the capital earlier than in some other cities turned 2009 into the market’s hottest year yet.

Ottawa real-estate agents last year sold a record 14,742 properties — a 7.4-per-cent jump from 2008, when the sudden arrival of the recession sapped sales in later months.

The average price for all types of resale homes — from one-bedroom condos to multi-storey mansions — reached $303,900 for the year, and $307,800 in December.

That’s still well below most other big cities in Canada, but up almost five per cent from 2008.

The turnaround is prompting predictions for a strong, though probably not record, 2010, with further moderate price increases.

“A year ago, we wouldn’t have written the script that way,” admitted Pierre de Varennes, the new president of the Ottawa Real Estate Board.

“If we look at the way it ended — November, December, January and February — those months in volume were down anywhere from 18 to 24 per cent. So we had four very difficult months.”

That lull makes 2009’s record numbers more surprising. But home demand picked up in March and April, and five months of record sales followed.

Even in traditionally quiet December, 689 homes changed hands, a 47.5-per-cent increase from December 2008. That pushed 2009’s total by 177 sales past the previous best year, 2007.

De Varennes believes the change came when Canadians realized that this country didn’t share in the subprime mortgage woes of the U.S., and was in better shape than most when those problems helped trigger a global credit crisis.

“The confidence factor came back faster and stronger in Ottawa than in some other markets,” he added, “but the change in the marketplace was almost timed to the same period from coast to coast.”

For 2010, de Varennes expects price increases “in the single-digit range” and a more balanced market as more people put homes up for sale. At the end of last month, the board had just 2,617 homes on its Multiple Listing Service, compared to 3,787 a year earlier.

The listing shortage is continuing to spur multiple offers, or so-called bidding wars, for well-presented homes in sought-after neighbourhoods.

In general, however, there’s a well-known moderation in the educated and public servant-cautious Ottawa market. That attitude forestalls both the big price runups seen in Toronto and Vancouver and the sharp declines that some predict will follow the eventual rise of interest rates, or possible government job cuts to trim budget deficits.

In 50 years, Ottawa prices have dropped only five times, the worst by four per cent in one year, the real estate board head noted.

“People don’t get overly excited with exuberant news, but at the same time people don’t get panicky with dark and gloomy forecasts either,” de Varennes said. “There’s an air of stability and confidence that’s built into the marketplace.”

His forecast mirrors the Canada Mortgage and Housing Corp. outlook for Ottawa. In a November report, CMHC predicted a 2.3-per-cent increase in average resale prices and a slight drop in the pace of transactions.

CMHC expects a larger, 5.7-per-cent jump in the price of new homes in Ottawa, a sector that shared in the recovery of late 2009, though not at the record rate of existing homes.

Condominiums continued to be the most sought-after resale category, with the average condo price rising 17.9 per cent in December to $246,062.

Among other housing types, the average price rose 12.8 per cent last month to $330,471.

© Copyright (c) The Ottawa Citizen

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