🏡 Ottawa Real Estate Insider-Feb

 

Ottawa Real Estate Insider Feb 2024

Hi lovely people of Ottawa, Hope you are enjoying this warm winter and your resolutions still stand. February is when a lot of Asian communities celebrate their lunar new year, so happy new year to those who celebrate! This year will be the year of Dragon and the lunar new year falls on Saturday, February 10.

Reminders

Ottawa’s Vacant Unit Tax is due on March 21, 2024. You can read more about this declaration here: (Vacant Unit Tax | City of Ottawa). All homeowners in Ottawa are required to fill this declaration, if you have any questions, I am here for you. As we move gradually into the spring, you may want to check your sump pump system (if you have one in your basement) to see if it works. Although typically in Ottawa we should not use sump pumps before April, with the warmer weather your pump may be up and running sooner than you think. Please make sure that your pumps are working, and if you have a backup battery system, that it can hold charges.

Market Update

January is supposed to be another slow month generally speaking, as most Canadians are recovering from the holiday season. This January is no exception, although activities slightly picked up compared to the same time last year (2023), but still below the average 5 years according to OREB (Ottawa’s MLS® Market Thawed in January but Sales Still Slow – Ottawa Real Estate Board (oreb.ca)). That said, all segments still see a net increase from the January 2023 prices, but below the highest point in 2022.

Highlights

Some key facts from the latest OREB report that are worth your attention: The new listings were 17.5% above the five-year average and 0.8% above the 10-year average for the month of January, indicating more people are selling. Active listings were 57.4% above the five-year average and 16.6% below the 10-year average for the month of January. Months of inventory numbered 3.1 at the end of January 2024, down from the 3.5 months recorded at the end of January 2023. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity. This means that so far Ottawa was able to absorb the increase in inventory in the last few months. This is also my personal experience with my clients thus far. Some other news that will affect the housing prices in Ottawa The Government of Canada finally decided to control the inflow of temporary residents, starting with international students (Federal government announces 2-year cap on student permits | CBC News). This will definitely help with some of the housing shortages, especially in the rental market close to Algonquin College and the two universities. In the same stroke, the Canadian government also extended the Foreign Buyers’ Ban until 2027 (Government extends ban on foreign buying of Canadian housing | CBC News). While this only affects a tiny portion of the overall real estate market, the signal that different levels of government are sending across Canada is quite strong and I believe this will be a front-and-centre election issue for a while. CMHC also released a long-waited rental housing report (you can read about it here: Rental Market Report - January 2024 (cmhc-schl.gc.ca)). Highlights for the Ottawa market are quite staggering: the first vacancy rate is chronically low for both purpose-built and condominium segments (2.1% and 0.4% respectively). Second, while purpose-built properties have had a lot of increases in supply, there is still a chronic shortage of housing in all segments. Last, it is becoming increasingly difficult for families to find housing that meets their needs (and budget). I had a few clients that had a great deal of difficulties in finding appropriate rental housing for their families. The last interesting news is that the Bank of Canada decided to hold its interest rate at 5% (No change on interest rate as Bank of Canada sticks to 5% | CBC News). Although the majority of the economists are predicting a lower interest rate in the latter half of 2024, the Governor of Bank of Canada indicated in the same briefing that inflation is “still too high” and it’s premature to discuss an interest rate cut. In summary, my little crystal ball is betting on no major housing price corrections for 2024 (lower or higher) in Ottawa, as all agents in the real estate market are still trying to correct the chronic supply issue, while trying to fix some of the demand issue (less temporary residents for example). However, as the interest rate continues to be the biggest factor and will remain unchanged for a while, I would suggest anyone thinking of buying start a little bit earlier this year to avoid the spring rush, as we are still in the buyer’s market now. Have a chat with me and I’m more than happy to offer my advice!

Thank You

While we probably won’t see each other on Rideau Canal this year, hopefully you can enjoy the warmer weather 😊