I’m happy to report good news on several fronts from Ottawa’s resale market in November, including unusually strong sales numbers and average prices that again show why the Ottawa market remains such an attractive one for buyers.
Though November is usually a time of year when sales start to slow down after the busy summer months, the numbers this year were only a few units shy of the strong October sales.
The Ottawa Real Estate Board reports that its members sold 1,239 residential properties through the Multiple Listing Service system in November. That’s up substantially from the 992 properties that were sold in November of 2016, representing an increase of 24.9 per cent. The five-year average for November sales in our region is 1,001.
The impressive November numbers are continuing a strong year for resales in the Ottawa area throughout 2017, says Rick Eisert, President of the Board, in a press release.
“Both residential sales and condo sales continue to steadily increase,” he says.
The November sales numbers included 945 homes in the residential property class and 294 units in the condominium property class.
The Board reports that the average price of a residential-class (non-condo) property sold in the Ottawa area in November was $418,354. That’s a 3.2 per cent increase over the average sale price in November of 2016.
The average price for a condominium-class property sold in November was $257,212, a decrease of 7. 2 per cent from the average price in November of last year.
It’s good to keep in mind that the average sale price is based on the total dollar volume of all properties sold in that month. If there are an unusually large number of higher or lower-priced properties sold in that month, the average sale price will obviously be affected.
The Board cautions that while average sale prices for a specific month can be useful in establishing trends over time, they should not be used as an indicator that specific properties have increased or decreased in value. Prices and conditions will vary from neighbourhood to neighbourhood.
A closer look at the price range of properties sold in November offers a reminder of what an appealing market the Ottawa-area region remains. Compared with Vancouver and Toronto, where average sale prices are in the $1 million range, Ottawa continues to see much more affordable prices.
For example, 46 per cent of the residential-class properties sold in Ottawa in November were in the $300,000 to $450,000 range. Of the condominium units that sold, 66 per cent were priced between $150,000 and $275,000.
In the press release, Rick Eisert says he was not surprised by the strong sales in November. He says the sales could be connected to new lending restrictions that will go into effect in the new year.
In October, the Office of the Superintendent of Financial Institutions announced new restrictions that will go into effect Jan. 1, 2018.
Rick Eisert says the coming changes “may have buyers rushing into the market before the stricter mortgage regulations come into play. If this keeps up, I expect December could be a busier than usual holiday season for realtors.”
As part of an effort to ensure that homebuyers can afford their homes and their mortgage payments if interest rates go up, buyers who have a down payment of 20 per cent or more will have to prove that they could afford payments if interest rates rise above the five-year benchmark rate published by the Bank of Canada, or two per centage points higher than the buyers’ contracted mortgage rate, whichever is higher.
Previously, that test had been applied only to those with smaller down payments.
With the busy Ottawa market, which has been strong all year, Rick Eisert says it’s crucial “to ensure you are pricing your property correctly. Having the guidance and market knowledge of a realtor is essential for home buyers and home sellers.”
If you’re considering buying or selling property in the Ottawa region, I’d love to meet and chat about the services my team and I offer and the expertise I have in the Ottawa area, after more than three decades as a realtor.