Activity in Ottawa’s condominium market will slow down in 2014 as developers wait for buyers to snap up already-finished units before going ahead with new projects, the lead economist for Ottawa at Canada’s national housing agency is forecasting.
Sandra Perez Torres, the Canada Mortgage and Housing Corp. senior market analyst for Ottawa, said there is still healthy demand for multi-family units but it will take some time for interested buyers to occupy what is available.
The CMHC is predicting multi-family housing starts – a category that includes condominiums as well as other housing types – will clock in at 3,700 for 2014. That’s a 21-per cent decrease over the 4,700 starts the organization is predicting for this year.
“The demographics in Ottawa are still supporting condos, however because we have seen a lot of construction in the last two years it might take a couple of years (or) at least one year for these apartments to get absorbed,” said Ms. Perez-Torres in an interview at this year’s edition of the CMHC’s annual housing conference.
The amount of inventory that has been completed but not yet sold is far higher for condos than others, she said. About 23 per cent of condo apartments fall into that category while semi/row units are at eight per cent and singles are at five per cent.
The CMHC expects activity in the other methods people have for getting into a new home – moving into a just-constructed single-family house or purchasing an existing housing unit on the resale market – to increase.
Total sales in 2014 are going to jump to 14,140 from an expected number of 14,000 for 2013 with the average sale price going up slightly to $358,000 from $356,000.
Single family starts will increase to 1,650 from 1,600. However the decline in multi-family construction will pull new starts down to 5,350 from an expected number of 6,300 for 2013.
On the whole Ms. Perez Torres predicted the Ottawa housing market will moderate in 2014 as the share of people employed in the public administration sector, which includes those working in the federal government, continues to decrease from 24.4 per cent.
By 2014 that will be down to 21,8 per cent, CMHC is predicting.
However she said employment will continue to grow because the region has a number of other employment sectors.