Ottawa housing prices to jump again next year.
December 1, 2005 - Get ready to pay more for a house next year. The average price of a resale home in Ottawa will jump five per cent next year, according to Royal Lepage Real Estate.
LePage's 2006 market forecast suggests the average price of an Ottawa home on the resale market will reach $270,900 next year. Sales activity is forecast to decline by three per cent to 13,100 units changing hands.
"There are signs of slower growth in the Ottawa market; 
however, we need to be conscious of the fact that we are coming off a period of record activity and price appreciations," says Pierre de Varennes, broker/owner of Royal LePage Performance Realty. "When compared to historical numbers, Ottawa's housing market remains robust."
Increased inventory and lower in-migration to the Ottawa area in 2006 will moderate the market's growth rate. Housing starts will continue to dip as existing demand for new homes is met and buyers are attracted to more competitive prices in the resale market.
Despite the strong growth seen over the last five years, carrying costs are comparable to those of 10 years ago.
The city's efforts to curb urban sprawl mean housing suited to the city core's limited space, such as condominiums and townhomes, is expected to rise. Condominiums will continue to be popular among young professionals who are willing to compromise space for convenience and location, while baby boomers and retirees looking to downsize will continue to look to condos for their affordability and maintenance-free lifestyle.
Across Canada, Royal LePage says the average house price will increase by 6.0 per cent in 2006 to $271,800. Transactions are forecast to slip three per cent to 467,540.
Strong economic fundamentals will sustain healthy growth in the housing market across the country, with particular strength seen in the West.
"Those looking for a break from the frenetic pace that has recently characterized the housing market will see some moderation next year, but the effects of an unusually strong fall market are expected to carry through into the first half of 2006, with the upward pressure on prices to continue in most areas of Canada," says Phil Soper, president and chief executive officer of Royal LePage Real Estate Services.
Higher prices for Canadian oil and gas will be one of the major factors influencing the market in 2006. Job growth and in-migration to western Canada and corresponding higher consumer spending will sustain sizable gains for the housing markets in Alberta, British Columbia and Saskatchewan well into next year.
Home prices in Calgary are forecast to jump nine per cent next year, and eight per cent in Edmonton.
© Ottawa Business Journal 2005