Ottawa housing market to show stability in coming months: economist

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Published on November 26, 2010

Elizabeth Howell

With resale housing in Ottawa poised almost perfectly between supply and demand, the market will remain "pretty decent" in the near term, a Conference Board economist said.

Robin Wiebe's comments came on the heels of the board's monthly metro resale index, released Friday, which in October showed Ottawa in the middle of expected price increases nationally at about three per cent.

This is approximately the same increase as inflation, which stood at 3.3 per cent locally in October.

Seasonally adjusted resales stood at 14,087 in October, slightly up from 13,860 in September but down from 16,343 a year ago.

The Conference Board noted October 2009 sales across Canada were "abnormally high", though.

"We are looking at a period of stability out here," Mr. Wiebe added.

"Sales have certainly ticked up in the last couple of months, but they are still relatively low by comparison. For instance, this time last year we're showing (monthly) sales were up into the low 16,000 range and then ... last December sales were just over 17,000."

The sales-to-new-listing ratio was 0.570 in October, which means for every 1,000 listings 570 houses are sold. The Conference Board defines a balanced market range in Ottawa as falling between ratios of 0.393 and 0.709, placing that month's figures in the middle of the range.

Government employment has always helped the market stay steady, Mr. Wiebe said, but the early 2000s tech boom pushed residential real-estate into a better growth phase that still reverberates today.

"Sales in this community are way higher than they were during the 1990s and during the 1980s, so the market over the last decade has moved to a whole new level," said Mr. Wiebe, who prior to his Conference Board employment was was an Eastern Ontario market analyst with the Canada Mortgage and Housing Corporation for 18 years. His job included Ottawa.

"That is because during the early part of the decade it was the tech bubble, or the tech boom, that attracted a lot of people. That established a critical mass of population ... and there is a whole new level of activity over the last 10 years."

Earlier this month, the Canadian Real Estate Association published figures showing national real-estate in October was "halfway between the highs and lows posted between late 2008 and late 2009."

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AnonnyRonny: - November 30, 2010 at 23:30:46

I love the fact that all these people are rushing into the top of the market. So many people telling me the same B.S., Buy NOW or NEVER. Lol. When you hear statements like that you know you should run! I rent an apartment for $850 all inclusive. I have over $100K liquid cash, invested and in secure bonds and savings accounts. Property tax alone + housing maintenance = my $850 a month. I make more money off my liquid cash, then fools who buy into huge mortgages, pay huge interest, and laugh when their houses "appreciate" at 7% a year (which they never see 1 penny from until they sell, providing the market is good). I have learned to live within my means, and not buy into huge mortgages just to show off. As housing will not appreciate, and will likely depreciate over the next 5 years, all the while you will be paying interest, plus property taxes and maintenance , PLUS lost interest on the equity tied up in your house "investment". I will be the one laughing, Paying interest on a depreciating asset. It is quite funny...

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J

- December 22, 2010 at 11:56:10

Seriously, AnonnyRonny , you should check your facts. You make it sound like real estate is like a car. FYI interest rates are at the lowest in the history of the world, and real estate is and will continue appreciating. It is certainly possible to own a house for $850 a month; however it will not be a palace, and I am sure your $850 a month apartment is not either.There are blips in real estate, as in any investment, but it is not a bad investment.

theletterM: - November 30, 2010 at 16:11:50

The low cost of borrowing has driven up the sticker price for housing across the country. Politicians of every stripe have allowed this shortsighted policy to continue unfettered for the better part of ten years. Now, nobody wants to take responsibility for it and the market has become so ridiculously over-priced that average incomes can no longer buy average houses in most urban areas. It is shameful that governments at every level seem to only support rental housing as an option for lower income Canadians, as the cost home ownership has risen so dramatically, that many have simply given up on the dream of home ownership. High property taxes, deficits, new taxes in ON and BC, and an out of control market have created a housing bubble of epic proportions, but nobody wants to talk about it, as that would make the messenger responsible for precipitating the obvious. So, the market continues to prop itself up on the propaganda that if you don't BUY NOW, you'll NEVER BUY! Thanks for selling out the home ownership dream to more and more Canadians, Harper!