Local home resale market continues to balance out in Q2.
July 6, 2004 - Home prices in Ottawa continued their inevitable climb upward during the second quarter, according to a report on Tuesday, but the resale market has settled down to a more sustainable level of activity.
In its latest quarterly report, realtor Royal LePage said that the average resale price for a detached bungalow or standard two-storey home in Ottawa rose about 5.6 per cent in the second quarter from the same period the year before. The condo market continued to appreciate at a faster clip, with the average price up 8.5 per cent.
The increases in local resale prices have now held to the five-per-cent range for much of the past year, a substantial decline from the peak of the housing boom in 2001 and 2002 when prices spiked by 15 per cent or more year over year.
"Healthy inventory levels helped to moderate average house price increases in Ottawa," Royal LePage said in the report. "A greater volume of listings began to meet the pace of demand and helped the market move toward balanced conditions, with the exception of some areas in the city's centre where pockets of low inventory persisted."
The report found that buyers have become less willing to pay top dollar and enter into a bidding war on a property. Only in areas of the city core where demand remains tight do multiple bidding situations still occur.
According to Statistics Canada, the local job market has remained relatively flat over the past six months. That plateau followed months of strong job growth fueled by public sector hiring. While that hiring spree appears to have ended, local Royal LePage broker Pierre de Varennes said consumer confidence remains high.
"Bricks and mortar investments were especially popular through the spring," he said in the report. "Investors recognized stability in real estate investments and were eager to take advantage of low interest rates and the low cost of borrowing money."
The big driver, he said, was the condominium market in the south end of the city, with the average selling price up 13.4 per cent from a year ago to an average of $135,000.
Overall, the average selling price for a detached bungalow in the April-to-June period was $256,637, up by 5.6 per cent from $243,036 in last year's Q2. The price for a standard two-storey home rose by 5.5 per cent, to $254,429 from $241,143. The average price for a condo rose by 8.5 per cent, to $163,143.
TORONTO, B.C. CITIES STILL LEAD
Among the 15 markets surveyed, those numbers put Ottawa in fourth place in terms of average price for a freehold home behind frontrunner Toronto and B.C. hubs Vancouver and Victoria.
The highest price for a home in Canada is found in Toronto, with a standard two-storey fetching $471,978, on average, in the second quarter.
In the condo market Ottawa placed third behind Toronto and Vancouver and only slightly ahead of Victoria. Toronto again ranks as the most expensive market in Canada, with the average condo costing $236,621.
The average among the 15 urban markets surveyed by Royal LePage was $249,200 for a detached bungalow, an increase of 6.8 per cent from last year, $311,509 for a standard two-storey, a increase of 8.5 per cent, and $176,013 for the typical condo, an increase of 6.5 per cent.
Commenting on the Canadian housing market as a whole, Royal LePage president and CEO Phil Soper said in the report that "demand has remained steadfast and strong in the past several years with vigorous activity only limited by a shortage of supply.
"While spikes in activity are typical of the spring real estate market, a record wave of new listings materialized across the country during the second quarter which allowed for the expression of pent-up demand."
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