🏡 Ottawa Real Estate Insider-Jan

 

Ottawa Real Estate Insider Jan 2024

Hi lovely people of Ottawa, Wishing you a great kickoff to 2024! My new year resolutions are to stay healthy, and enjoy life as much as I can, even if it is a pickle 😊if you haven’t already, please follow me on different social media (IG: Xing Gao (@xingrealestate)) and check my progress on my new year resolutions! Let me know your new year resolutions via email/call or even over a coffee.

Reminders

Ottawa homeowners should have received your notice to file for the Vacant Unit Tax by now. If not, please visit this page for guidance on filing (Vacant Unit Tax | City of Ottawa). The deadline for filing is March 21, 2024. As the warmer part of the winter draws close and normal temperature kicks in, you may want to pay extra attention to your heating equipment, especially high-efficiency natural gas furnaces. Not only do you need to regularly change your filters, but you also have to check for snow/ice buildup for the exhaust pipes of your system (typically a couple of white PVC tubes coming out of your house). Failure to do that could result in system failure and potential CO poisoning. Here’s a helpful guide (What to do about snow and ice buildup around furnace vents - Winnipeg | Globalnews.ca). The Trust in Real Estate Services Act (TRESA) is now in effect in Ontario. Ask me about the differences from the previous legislation and how to safeguard your interests.

Market Update

While December tends to be a slower month for transactions, December 2023 is no exception. I have summarized key changes in the graphics below based on the latest OREB numbers.

Highlights While the market behaved mostly as expected, there are some still notable differences for 2023 compared to previous years. All segments of the residential housing market witnessed a price decrease from the peak of 2023. However, on a year-over-year basis, all segments (single, townhome and apartment condo) still showed positive gains compared to their average prices in 2022. The dollar value of all home sales in December 2023 reached $357.3 million, making a significant 9.4% increase from the same month in 2022. This exceeded the housing price increase, possibly indicating some renewed interest from buyers/sellers alike. While new residential listings decreased by 12.4% from December 2022 to December 2023 (with 523 new listings), active residential listings at the end of December 2023 increased by 3% compared to December 2022, totaling 1,844 units. Despite being 55.5% above the five-year average, it remains 17.2% below the 10-year average for December. This means two things, one that houses are being sold at a slower pace than a year ago, and two that as the mortgage renewal becomes reality for more and more homeowners, some are choosing to sell. The months of inventory decreased slightly from 3.4 months in December 2022 to 3.3 months in December 2023. This metric indicates the number of months it would take to sell the current inventory at the current rate of sales activity, suggesting a relatively stable market in terms of supply and demand. I have been asked by some of my clients about my thoughts on housing price variation in the future, so here is my first analysis and prediction for the 2024 Ottawa real estate market: The housing supply is still in shortage. Official CMHC data is pending, however anecdotally every single one of the rental properties that I showed to my clients was rented within a week (even those normally harder to rent). Housing construction in Ontario is slowing down due to higher interest rates and other factors (Ontario's road to 1.5M new homes has gotten rockier, construction insiders say | CBC News), the supply side remains difficult and will remain difficult to resolve for 2024. That said, 3.4 million Canadians will renew their mortgages by 2025: Royal LePage | Financial Post, which means that some would have to sell due to financial pressure, thus increasing supply to some extent. On the demand side, the Federal government has decided to keep the cap on the immigration level for the next two years (What To Expect From Canada Immigration In 2024 - Canada Immigration and Visa Information. Canadian Immigration Services and Free Online Evaluation.), we are not going to see a significant drop in newcomers to Ottawa in 2024, temporary residents or not. However, intra and inter-provincial immigration to Ottawa could decrease, as the biggest employer of our city (the federal government) is looking at reducing the number of public servants (Size of federal public service swells to record high, according to report - The Globe and Mail). Another big factor driving down some demand is the higher interest rate and tight mortgage rule, however, I do believe all factors combined, Ottawa is not going to have a demand problem as only a handful of our houses are overpriced and our social economic structure is much more stable than the majority of the Canadian cities. In summary, I do believe we will not see any major housing price corrections for 2024 (lower or higher) in Ottawa, as this is the opinion of most experts that I read thus far (Where Ontario's housing market is headed in 2024 | CBC News). However, Ottawa is moving further into buyer’s market territory, which means buyers can have more choices if budget is not of concern, and sellers need to be a bit more patient and realistic in their expectations. That said, some properties will still be sold very fast (I have visited a single family in Rockland, which was sold in 3 days) as supply and demand are still not at equilibrium for the entire housing market (rental and purchase). For primary residence buyers, I think 2024 is an exciting time to act; for potential sellers, I would often say to think of how much you want to make instead of how much you’ve seen others make in 2021-22. Have a chat with me and I’m more than happy to offer my advice.

Thank You

Enjoy the rest of the winter, and perhaps we’ll cross paths on the Rideau Canal in 2024!

Refer a friend :)