Housing prices up 14% over two years, but experts say there’s no fear of sudden drop
A healthy labour market, coupled with low interest rates, are behind the strong appreciation in the value of residential real estate in the nation’s capital, several local realtors say.
David Sugarman, a sale representative at Coldwell Banker Rhodes. (Photo by Mark Holleron)
The resale price of Ottawa homes jumped 14 per cent between January 2009 and January 2011, according to statistics from the Ottawa Real Estate Board.
Taking into account both free-standing houses and condos, the average price in Ottawa stood at $329,657 in January 2011, some $9,000 more than last year and $40,000 more than in 2009.
“We have a very good job market and, as long as our job market remains strong, our housing market remains strong,” said the board’s president Joanne Tibbles.
She added Ottawa typically doesn’t experience the same fluctuations as other Canadian cities such as Toronto and Calgary.
Others say rock-bottom interest rates are increasing demand.
“It’s been fuelling the real estate market,” said Ray Otten, a broker at Renaud Otten.
“As long as the demand for houses is greater than the supply, there will be an increase even during times when incomes are not going up as fast,” Mr. Otten added.
Indeed, buyers were still entering the market even as their incomes remained relatively flat, said David Sugarman, a sale representative at Coldwell Banker Rhodes.
He attributed this both to first-time homebuyers getting help from better-off parents, and to the easy availability of listings both on and off the MLS systems.
“People’s ability to search and find things at a different pace has accelerated their buying and selling needs – not just for property but many, many things,” he said.
“The quicker the transaction, the more the turnaround time has been shortened, and everybody starts getting on board.”
With home prices accelerating faster than income, there are concerns that home ownership is becoming unaffordable for a growing segment of the population.
But the stability created by the presence of the federal government has some downplaying any suggestion that Ottawa is in the midst of a real estate bubble.
“It feels like we’re not on a peak ... We’re a consistent (market),” said Steve Tusco, an independent broker in Ottawa.
If anything, he said, there are signs things are gradually cooling.
“Last year, when I bought my place, I had to go over the asking (price). This year (houses I represent) go for under asking.”