After ending 2016 with a bang, Ottawa’s residential real estate market is poised for modest gains this year, according to one of the country’s largest realtors.
Royal LePage forecasts local home prices will rise 1.7 per cent in 2017, but cautions that the appreciation could be sharper if the currently low level of listings persists.
“The level of inventory in Ottawa is much lower than we’ve seen in previous years, which limits opportunity for buyers and pushes prices upward,” said John Rogan, broker of record at Royal LePage Performance Realty, in a statement. “It’s a demand and supply issue. Listings priced correctly are selling quickly.”
In the final three months of 2016, aggregate home prices in Ottawa - a weighted average of the median values - stood at $415,806, a 5.1 per cent increase over the previous year, according to Royal LePage, with some variation between various housing categories:
- Two-storey homes were up by 4.4 per cent to $432,157;
- Bungalows climbed 8.5 per cent to $418,070; and
- Condominiums increased 3.5 per cent to $321,774.
Thursday’s Royal LePage report comes a week after the Ottawa Real Estate Board said the average resale home price reached $420,750 in December, an all-time record and an 8.7 per cent increase from a year earlier.
Nationally, Royal LePage predicted that the extreme regional disparities that characterized Canada's real estate markets last year will narrow in 2017 as overheated areas cool and slower markets gather steam.
That trend will be driven by lower prices in Greater Vancouver and strong but moderating price growth in the Greater Toronto Area, the real estate company said.
“The disparity in home price appreciation between Canadian regions has never been greater than that seen in 2016, with rates ranging from double-digit extremes in some cities to negative growth in others,” Phil Soper, president and CEO of Royal LePage, said in a statement.
“In 2017, we anticipate a movement away from the regional extremes of real estate feast and famine - and that is a very good thing.”
Royal LePage's national composite index of prices grew 13 per cent year-over-year to $558,153 in the fourth quarter of last year, the highest increase recorded by the index in more than 10 years. Two-storey homes led the charge, rising 14.3 per cent to $661,730, while the price of a condo was up a more moderate 7.4 per cent to $356,307.
Nationally, home prices are forecast to climb 2.8 per cent this year, Royal LePage said.
In Greater Vancouver, an 8.5 per cent price correction is expected, in spite of the fact that the province's economy is projected to lead the country this year. Even with that decline, home prices would be $1,126,000.
“While the cost of a home in Greater Vancouver will remain the highest in the country, a modest price reset will provide much needed relief in the Lower Mainland and help reignite overall buyer activity in the region,” Soper said.
That contrasts with the outlook for GTA's real estate market, where Soper says there is “no relief in sight” as underlying economic fundamentals remain strong. Prices in the area are expected to hit $793,000, an increase of 10 per cent.
- With a report by the Canadian Press