Carole Wilson

Carole Wilson

Broker

Mobile: 613.668.9356

Phone: 613.830.3350

Email: info@carolewilsonottawa.com

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“Catch 22” Defines the April Resale Market

May 3, 2019

Members of the Ottawa Real Estate Board sold 2,032 residential properties in April through the Board’s Multiple Listing Service® System, compared with 2,024 in April 2018, an increase of 0.4 per cent. April’s sales included 1,594 in the residential property class, on par from a year ago, and 438 in the condominium property class, an increase of 5.3 per cent from April 2018. The five-year average for April unit sales is 1,825.

“The story hasn’t changed throughout this spring – our market is clearly suffering from low inventory, and we predict these conditions will persist until supply is restored,” states Dwight Delahunt, President of the Ottawa Real Estate Board.

“Several factors continue to have an impact in this regard including the lag in new construction coming to market and the reluctance of potential sellers who are facing limited options when they are buying within the same market. Add to this a stress test for buyers, that can limit purchasing capacity in a market where prices are accelerating, and it becomes a “Catch 22” situation for the foreseeable future.”

“Residential supply is down 18%, and condo inventory is down almost 40% from last April. Despite this tight supply, the residential market is holding its own and the increase in unit sales is effectively coming from the condo market which until recently, was in a surplus,” he notes.

The average sale price of a residential-class property sold in April in the Ottawa area was $488,729, a rise of 7.4 per cent over April 2018. The average sale price for a condominium-class property was $307,659, an increase of 14.3 per cent from this month last year. Year to date numbers show a 6.6 per cent and 8.7 per cent increase in average prices for residential and condominiums respectively. *

“An active market with limited supply is inherently going to put an upward pressure on prices,” Delahunt explains. “However, this bodes well for the condo market by which the absorption is allowing for the rebounding and recovery of its price points.”

“Certainly, the stunted supply is likely responsible for the multiple offer situations we are experiencing, but the reality is that while approximately one-third of properties are selling above asking, more than 50% are still selling below the listed price.”

“Ottawa is a stable and affordable market and has been since the 1940s – we are not in a bubble,” Delahunt emphasizes.

The increased $350,000 to $499,999 price range has now become the most active price point in the residential market, accounting for 44 per cent of April’s transactions. Also worth noting, 28.5 per cent of residential sales were in the $500,000 to $749,999 range up from 23-25 per cent previously. The most prevalent price point in the condominium market which had increased to the $225,000-$349,999 price range last month, remains so, accounting for 46 per cent of the units sold.

“The increase in price points are indicative that availability in the lower priced housing stock is just not there and is pushing people up to the higher end of the market. Nevertheless, the fact is, these price points are still well under the Canadian average, and our residents tend to be in comfortable financial situations due to secure employment and a thriving local economy,” Delahunt concludes.

In addition to residential and condominium sales, OREB Members assisted clients with renting 778 properties since the beginning of the year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

A Slow March into Spring Market for Ottawa Real Estate

April 3, 2019

Members of the Ottawa Real Estate Board sold 1,511 residential properties in March through the Board’s Multiple Listing Service® System, compared with 1,654 in March 2018, a decrease of 8.6 per cent. March’s sales included 1,136 in the residential property class, a drop of 12.4 per cent from a year ago, and 375 in the condominium property class, an increase of 5 per cent from March 2018. The five-year average for March unit sales is 1,402.

“Lack of inventory is responsible for March’s deficiency in residential unit sales,” states Ottawa Real Estate Board’s President, Dwight Delahunt. “This tightness of supply is manifesting in significant reductions in DOMs (days on market) and properties selling very quickly. Residential DOMs are down 14%, and condo DOMs are down 36% from last year.”

“In some pockets of the city, buyers are facing multiple offer situations, and properties are often selling over list price. These dynamics of low inventory, reduced days on market, and multiple offers are signs of a seller’s market in these areas. While a benefit to those sellers, it’s stressful and time consuming for buyers. The experience and guidance of a REALTOR® is essential in these types of market conditions,” he adds.

“A major factor contributing to the lack of housing stock is the shortage of quality options for those who might list their homes. Move-up sellers feed the market for first-time homebuyers. Another issue which adds to a seller’s reluctance to put their home on the market is the B-20 stress test which affects their purchasing power,” Delahunt asserts.

“In Ottawa, we have a population base that’s increasing year over year with a growth rate of 8.8 percent, which is higher than Ontario (5.7%) and Canada as a whole (5.9%). Immigration and high employment levels are bringing residents to our desirable and affordable city,” he suggests.

Delahunt continues, “With high demand and limited supply, prices will continue to be pushed upwards – it’s a simple and fundamental economic principle. Although we appreciate the recent measures the federal government has taken towards affordable homeownership, all three levels of government need to work together at implementing mechanisms that will also restore the supply side of the market.”

The average sale price of a residential-class property sold in March in the Ottawa area was $480,143, a rise of 7.2 per cent over March 2018. The average sale price for a condominium-class property was $290,181, an increase of 5.2 per cent from this month last year.*

The $300,000 to $449,999 price range continued to represent the most active price point in the residential market, accounting for 43 per cent of March’s sales while 1 in 4 residential sales was in the $500,000 to $749,999 range. The most prevalent price point in the condominium market increased to the $225,000-$349,999 price range, accounting for 49 per cent of the units sold.

“The condo units in the entry-level range are near depletion as first-time homebuyers are trying to get into the market at the lowest possible price. Moreover, previous renters may have been pushed into condo ownership with rental vacancy rates in Ottawa at less than 1%. If there were concrete incentives for investors to purchase properties to lease or develop purpose-built rentals – it could certainly stimulate the rental market,” Delahunt concludes.

In addition to residential and condominium sales, OREB Members assisted clients with renting 550 properties since the beginning of the year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

February Buyers Snap Up Limited Inventory

March 5, 2019

Members of the Ottawa Real Estate Board sold 1,005 residential properties in February through the Board’s Multiple Listing Service® System, compared with 978 in February 2018, an increase of 2.8 per cent. February’s sales included 756 in the residential property class, a rise of 3.8 per cent from a year ago, and 249 in the condominium property class, a decrease of 0.4 per cent from February 2018. The five-year average for February sales is 949.

“February has been a strong month, and with year-to-date unit sales 8% higher in both the condo and residential categories, it is looking very favourable for the spring market,” states Ottawa Real Estate Board’s 2019 President, Dwight Delahunt.

“Days on market continue to decline, and although inventory has fallen to its lowest level in many years, we are still managing to satisfy demand even with 900 fewer listings than this time last year,” he adds. “If we had more supply, our unit sales would be even greater.”

The average sale price of a residential-class property sold in February in the Ottawa area was $466,540, an increase of 8.6 per cent over February 2018. The average sale price for a condominium-class property was $288,354, an increase of 5.6 per cent from this month last year.*

“The Ottawa market is well ahead of inflation in regards to average prices for both condo and residential properties. We are in a comfortable position and remain one of the most affordable markets in the country,” Delahunt points out.

The $300,000 to $449,999 range continued to represent the most active price point in the residential market, accounting for nearly 44 per cent of February’s sales while 26 per cent of residential sales were in the $500,000 to $750,000 price range. Between $175,000 to $274,999 remained the most prevalent price point in the condominium market, accounting for 48 per cent of the units sold.

“If you are thinking about selling, don’t wait – get a jump on the spring market! Now is the time to have a conversation with your REALTOR® who understands the best way to position your home in the market and has the experience to guide you through its complexities,” Delahunt suggests. “This is the type of market you certainly wouldn’t want to navigate without one.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 342 properties since the beginning of the year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Canadian Real Estate Market Begins Recovery from the Most Significant Housing Correction in a Decade

 
 
 

According to the Royal LePage House Price Survey1, year-over-year home prices made healthy gains in many regions across Canada in the fourth quarter of 2018, continuing the recovery from the most significant housing correction since the financial crisis. Once again, the Greater Montreal Area saw the highest year-over-year home price appreciation rate of the three largest Canadian metropolitan areas studied.
 

The Royal LePage National House Price Composite, compiled from proprietary property data in 63 of the nation's largest real estate markets, showed that the price of a home in Canada increased 4.0 per cent year-over-year to $631,223 in the fourth quarter of 2018. When broken out by housing type, the median price of a two-storey home rose 3.9 per cent year-over-year to $745,007, while the median price of a bungalow climbed 1.5 per cent to $516,950. Condominiums continued to see the highest rate of appreciation nationally when compared to the detached segment, rising 7.2 per cent year-over-year to $447,915.
 

"The invisible hand that guides our complex economy hit the real estate reset button in 2018 and that is a good thing," said Phil Soper, president and CEO, Royal LePage. "Major market home price inflation through much of the decade had led to dangerous overheating in our most populous regions. Government regulatory intervention and rising interest rates, when combined with property price overshooting, triggered the correctional cycle we find ourselves working through today."
 

The Canadian economy is performing well overall, with pockets of uncertainty. Persistently weak oil prices driven by domestic market access bottlenecks and global supply gluts have hit Western Canada hard, and trade tensions between China and the U.S. in particular are impacting consumer confidence across the continent.
 

"While some economists are adjusting their forecast for the economy as a whole, Canada's real estate market is beginning to emerge from the correction that began a year ago. The national real estate market is stable and should see modest price gains by the end of the 2019," said Soper.
 

Royal LePage projected modest home price appreciation in 2019 in its recent forecast, expecting the aggregate price of a home in Canada to rise 1.2 per cent in Canada over the next year.
 

To view the chart with aggregated regions and markets visit www.royallepage.ca/houseprices
 

For more information see www.royallepage.ca/mediaroom
 

1 Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions.

 

January’s Record-Breaking Home Sales!

February 5, 2019

Members of the Ottawa Real Estate Board sold 820 residential properties in January through the Board’s Multiple Listing Service® System, compared with 708 in January 2018, an increase of 15.8 per cent. January’s sales included 611 in the residential property class, a rise of 14.2 per cent from a year ago, and 209 in the condominium property class, an increase of 20.8 per cent from January 2018. The five-year average for January sales is 683.4.

“January is typically one of the slowest months of the year for local real estate. Yet, in spite of the record cold and snowfall, unit sales are up almost 16%. This is the highest number of January transactions we have experienced in decades,” states Ottawa Real Estate Board’s 2019 President, Dwight Delahunt.

“Buyers are extremely motivated, despite the weather, and properties are moving very quickly as days on market continue to decline,” he adds. “If you’re thinking of selling, you don’t have to wait for spring. A REALTOR® is in the best position to assist in this active market where buyers are waiting for the opportunity.”

The average sale price of a residential-class property sold in January in the Ottawa area was $432,829, an increase of 1.5 per cent over January 2018. The average sale price for a condominium-class property was $283,990, an increase of 7.7 per cent from this month last year.*

“Even though inventory is at its lowest level in years, Ottawa’s home prices reflect reasonable appreciation. New builds are helping prices remain stable with homebuilders adding enough supply to keep the market equitable. We don’t have the supply constraints of Toronto and Vancouver because we have serviceable lots within a 20-minute drive,” Delahunt points out.

“Similar to the fact that you don’t need to own a BMW to get where you want to go, some of the more expensive neighbourhoods in the city are a lifestyle choice. The fact is there is quality affordable housing available for almost every level of homebuyer in Ottawa.”

The $300,000 to $449,999 range continued to represent the most active price point in the residential market, accounting for nearly 42.5 per cent of January’s sales while 22.7 per cent of sales were in the $500,000 to $750,000 price range. Between $175,000 to $274,999 remained the most prevalent price point in the condominium market, accounting for 54.1 per cent of the units sold.

When asked what he forecasts for the upcoming year, Delahunt speculates, “Based on last month’s sales, I’d say we go with Wiarton Willie’s prediction – it will likely be an early spring for the real estate market as well.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 169 properties in January 2019.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Another Stellar Year for Ottawa’s Real Estate Market

January 4, 2019

Members of the Ottawa Real Estate Board sold 663 residential properties in December through the Board’s Multiple Listing Service® System, compared with 765 in December 2017, a decrease of 13.3 per cent. December’s sales included 471 in the residential property class, a drop of 15.7 per cent from a year ago, and 192 in the condominium property class, a decrease of 6.8 per cent from December 2017.

Year to date activity increased by 2.4 per cent from 2017. The total number of residential and condo units sold throughout all of 2018 was 17,476, compared with 17,065 in 2017. Residential property class sales decreased slightly to 13,418 from 13,478 in 2017 and condominium property class sales were up 13.1 per cent with 4,058 units sold in 2018 versus 3,587 in the previous year.

“For the last decade, we have experienced steady growth in our real estate market from volume to prices; however, the past two years have jumped significantly in activity with a 12.6% increase in unit sales from 2016. Ottawa, and its surrounding area, has excellent employment numbers and has proven to be one of the most affordable larger cities in the country,” proclaims Ralph Shaw, Ottawa Real Estate Board’s 2018 President.

“What has come to a head in 2018 is the overall shortage of inventory which is extreme in certain pockets of the city. While this has caused unit sales to slide in the residential market, it has fueled the condominium market which has recovered and carried us through much of 2018. We have been predicting this will bode well for new construction in delayed high-rise projects,” he adds.

“Another significant factor affecting the market in 2018, and first-time homebuyers in particular, is the mortgage stress test – an attempt by the federal government to cool two major markets in the country.  It has also unfortunately made move-up buyers less likely to take that step and free up entry-level options, which is an important part of the resale market,” Shaw points out.

The average sale price of a residential-class property sold in December in the Ottawa area was $453,011, an increase of 4.7 per cent over December 2017. The average sale price for a condominium-class property was $278,295, an increase of 9 per cent from this month last year. Year-end figures show an average sale price of $446,661 for residential-class properties in 2018, a 5.1 per cent increase from 2017 and $278,316 for condominium properties, up 3.2 per cent from last year.*

“In 2019, we expect the economic fundamentals of supply and demand to be at play with upward pressure on prices due to limited supply and increasing demand. Buyers do have affordable options in outlying communities if they are willing to commute — or they will simply have to pay more provided they can qualify. New builds and purpose-built rental housing could help ease some of the pressure, particularly if builders are able to provide a variety of quality options allowing for more movement in the market,” Shaw concludes.

The $300,000 to $449,999 range continues to represent the most active price point in the residential market, accounting for nearly 45 per cent of December’s sales while almost one in four sales were in the $500,000 to $750,000 price range. Between $175,000 to $274,999 remained the most prevalent price point in the condominium market, accounting for 55.7 per cent of the units sold. Year-end figures echoed these dominating price points holding 45.6 per cent of the residential market and 49.8 of the condo market respectively.

In addition to residential and condominium sales, OREB Members assisted clients with renting 2,713 properties since the beginning of the year down from 2,977 from this time last year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Ottawa: One of Canada’s Real Estate Anomalies

December 5, 2018

Members of the Ottawa Real Estate Board sold 1,165 residential properties in November through the Board’s Multiple Listing Service® System, compared with 1,232 in November 2017, a decrease of 5.4 per cent. The five-year average for November sales is 1,055. November’s sales included 870 in the residential property class, a decrease of 7.2 per cent from a year ago, and 295 in the condominium property class, an increase of just one unit or 0.3 per cent from November 2017.

“Even though home sales are down this month compared to a year ago, this is simply a reflection of the lack of inventory that we have been experiencing all year. Unit sales would have been higher if only we had the selection and supply,” states Ralph Shaw, President of the Ottawa Real Estate Board. “Every REALTOR® I know has active buyers waiting for an opportunity, but many potential Sellers are in the same situation – and have no option but to stay put,” he adds.

The average sale price of a residential-class property sold in November in the Ottawa area was $429,039, an increase of 2.6 per cent over November 2017. The average sale price for a condominium-class property was $285,764, an increase of 11.1 per cent from this month last year.*

“Condominium sales continued to lead the way in November which included a higher average price percentage increase than single-family residential sales this month,” Shaw reports. “Robust sales over the last two years have stabilized the oversupply that previously existed in our condo market. Given that the rental market is as tight as it is, the condo market is not necessarily being driven by lifestyle choice but more often is purely about fulfilling accommodation needs.”

The $300,000 to $449,999 range remains the most active price point in the residential market, accounting for 47 per cent of home sales while the $500,000 to $750,000 price range continues to represent one in five of all residential home sales again this past month. Between $175,000 to $274,999 was November’s most prevalent price point in the condominium market, accounting for almost 47 per cent of the units sold.

“When you look at what’s happening in real estate markets across Canada, Ottawa’s market performance is the polar opposite,” Shaw declares. “Our market fundamentals are very strong, and we have experienced steady growth for many years, and indeed decades.”

“With our average home prices lower than the national average and our high employment levels, there is no doubt that Ottawa is one of our country’s most ideal locations to live, work, play, and raise your family,” Shaw concludes.

In addition to residential and condominium sales, OREB Members assisted clients with renting 2,553 properties since the beginning of the year down from 2,821 from this time last year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Halloween has not Scared Away Home Buyers

November 5, 2018

Members of the Ottawa Real Estate Board sold 1,383 residential properties in October through the Board’s Multiple Listing Service® System, compared with 1,237 in October 2017, an increase of 11.8 per cent. The five-year average for October sales is 1,223. October’s sales included 1,059 in the residential property class, a rise of 8.5 per cent from a year ago, and 324 in the condominium property class, an increase of 24.1 per cent from October 2017.

“October’s sales are truly indicative of the fast-paced market we have experienced for much of 2018,” points out Ottawa Real Estate Board President, Ralph Shaw. “In some pockets of the city, listings are not lingering on the market. Year-to-date average Days on Market (DOMs) are down 14% from 45 to 39 days for residential homes and 24% from 68 to 51 days for condominiums.”

“However, lack of supply continues to be a major driving factor in Ottawa’s real estate market,” he adds. “If we look back to 2015 and 2016, our current active inventory is less than half of what we had then, and it’s not improving. Compared to last year, condo inventory is down 34.5% while residential inventory is 17.5% lower than October 2017.”

“Ottawa’s reputation as one of the most affordable cities in the country endures with residential average prices up approximately 6% year over year, yet continuing to come in under $450,000. While average prices for condos remain reasonable and steady in the $270,000 range,” acknowledges Shaw.

The average sale price of a residential-class property sold in October in the Ottawa area was $449,005, an increase of 5.7 per cent over October 2017. The average sale price for a condominium-class property was $271,350, a slight increase of 0.6 per cent from this month last year.*

“Further, the number of apartment condo projects that have been approved by the City of Ottawa will maintain price stability for this category of housing going forward. This will offer opportunities particularly for renters who may be considering homeownership since the rental inventory is also down 32% from this time last year.”

The $300,000 to $449,999 range remains the most active price point in the residential market, accounting for 43 per cent of home sales while the $500,000 to $750,000 price range continues to represent one in five of all residential home sales this past month. Between $175,000 to $274,999 was October’s most robust price point in the condominium market, accounting for almost 53 per cent of the units sold.

In addition to residential and condominium sales, OREB Members assisted clients with renting 2,354 properties since the beginning of the year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Autumn Leaves are Falling; Home Prices are Not

October 3, 2018

Members of the Ottawa Real Estate Board sold 1,393 residential properties in September through the Board’s Multiple Listing Service® System, compared with 1,383 in September 2017, an increase of only 0.7 per cent. The five-year average for September sales is 1,303. September’s sales included 1,046 in the residential property class, a decrease of 2.5 per cent from a year ago, and 347 in the condominium property class, an increase of 11.9 percent from September 2017.

“We continue to experience supply-side issues going into our fall market. The fact is, the number of residential sales would be much higher had we more robust inventory to draw from,” states Ottawa Real Estate Board President Ralph Shaw. “Condos continue to represent a greater proportion of year-to-date unit sales with a 15 per cent increase from this time in 2017.”

The average sale price of a residential-class property sold in September in the Ottawa area was $449,613, an increase of 7.9 per cent over September 2017. The average sale price for a condominium-class property was $282,781, an increase of 7.6 per cent from this month last year.*

“Economic fundamentals are at play in our market with a lack of supply putting an upward pressure on prices in some areas,” Shaw asserts. “Condo price increases on a percentage basis are finally recovering and are catching up to the increases in residential prices which is very encouraging news for condo owners.”

“With the inventory of available apartment condo units also declining month over month; this trend of price improvements may help kick-start some of the mothballed condo projects to date,” he speculates.

The $300,000 to $449,999 range remains the most active price point in the residential market, accounting for 46 per cent of home sales while the $500,000 to $750,000 price range represents 22.5 per cent of residential home sales this past month. Between $175,000 to $274,999 was September’s most active price point in the condominium market, accounting for almost 57 per cent of the units sold.

“The low rental vacancy rate is spurring the purchase of condominium units, and first time home buyers wanting to enter the market are having to choose between “driving until they qualify” or purchasing a condominium at a price point they can afford.”

President Ralph Shaw offers one final thought. “Although the millennial generation is comfortable sharing their rides, they are not in the sharing mindset for housing – they want to own,” he contends. “In a recent study commissioned by the Canadian Real Estate Association (CREA), research conducted by Abacus Data shows that Housing Affordability is a key issue  and the homeownership dream is alive and well with this demographic.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 2,135 properties since the beginning of the year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Summer Ends, Active Real Estate Market Continues…

September 6, 2018

Members of the Ottawa Real Estate Board sold 1,586 residential properties in August through the Board’s Multiple Listing Service® System, compared with 1,535 in August 2017, an increase of 3.3 per cent. The five-year average for August sales is 1,417. August’s sales included 1,188 in the residential property class, relatively unchanged from a year ago, and 398 in the condominium property class, an increase of 10.9 percent from August 2017.

“Our real estate market has had a busier than usual summer season, and we are shaping up for a busy fall period as well,” affirms Ottawa Real Estate Board President Ralph Shaw. “An active market is likely to be the new normal for the foreseeable future,” he speculates.

The average sale price of a residential-class property sold in August in the Ottawa area was $433,684, an increase of 3.1 per cent over August 2017. The average sale price for a condominium-class property was $276,720, an increase of 2.2 per cent from August 2017.*

“Ottawa continues to be an affordable place to buy property and is experiencing sensible price growth more in line with inflation. Our inventory is very low (18% off last year’s inventory level) but other than some pockets of the city, prices have not yet been significantly affected,” Shaw reflects.

“The reason we aren’t yet supply problematic, like some other markets, is that we have the ability to expand in all directions — stretching the buyer’s purchasing power. Within an easy 30-minute commute, there are surrounding communities with reasonably priced single-family homes and all the fundamental needs supplied within these neighbourhoods.”

The $300,000 to $449,999 range remains the most active price point in the residential market, accounting for 45 per cent of home sales while the $500,000 to $750,000 price range represented a robust 22 per cent of residential home sales this past month. Between $175,000 to $274,999 was August’s most active price point in the condominium market, accounting for almost 56 per cent of the units sold.

“The demand for condos continues to be a driving factor in the Ottawa real estate market, likely due to the lack of rental availability. This is helping ease the oversupply of condos we experienced in the past,” Shaw points out. “Hopefully this will encourage developers to move forward with their stalled condominium projects, especially if the light rail is a go in November.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 1,890 properties since the beginning of the year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

A Sizzling Summer for Ottawa Real Estate

August 3, 2018

Members of the Ottawa Real Estate Board sold 1,614 residential properties  in July through the Board’s Multiple Listing Service® System, compared with 1,524 in July 2017, an increase of 5.9 per cent. The five-year average for July sales is 1,501. July’s sales included 1,238 in the residential property class, an increase of 3.6 per cent from July 2017 and 376 in the condominium property class, an increase of 14.3 percent from a year ago.

“Ottawa’s condo market continues to positively impact overall residential sales trends with year-to-date condo unit sales up 16.5 percent from this time last year,” states Ralph Shaw, Ottawa Real Estate Board President. “As well, our overall inventory levels in both the residential and condo market are improving which will help ease pressure on prices. Units available are currently down 16 percent down from July 2017 rather than the 24 percent we were down at the beginning of the year.”

The average sale price of a residential-class property sold in July in the Ottawa area was $441,206, an increase of five per cent over July 2017. The average sale price for a condominium-class property was $280,526, an increase of 5.3 per cent from July 2017.*

“We are noticing a surge in unit sales in the rural areas, particularly the west end,” notes Shaw. “This is not only driven by availability but likely includes other attractive aspects in these well-established communities such as reasonable commute times, convenient shopping options, and great schools and recreational facilities which aren’t overtaxed.”

Between $175,000 to $274,999 was July’s most active price point in the condominium market, accounting for almost 49 per cent of the units sold. While the $300,000 to $449,999 range remained the most robust price point in the residential market, accounting for 45 per cent of home sales. In addition, the $500,000 to $750,000 price range represented almost one in five residential home sales.

“Ottawa’s healthy real estate market is a reflection of its strong economy which is consistently firing on all four cylinders due to a secure employment base,” reflects Shaw. “It remains a competitive market, and multiple offers (when priced right) are still the norm in some neighbourhoods. Buyers and sellers alike require a REALTOR® to pave the way through the complexities of the market.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 1611 properties since the beginning of the year.

* The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Condo Sales Keep Market from Over Heating

July 5, 2018

Members of the Ottawa Real Estate Board sold 2,070 residential properties in June through the Board’s Multiple Listing Service® System, compared with 2,163 in June 2017, a decrease of 4.3 per cent. The five-year average for June sales is 1,914. June’s sales included 455 in the condominium property class, an increase of 11.5 per cent from June 2017 and 1,615 in the residential property class, a decrease of 8 per cent from a year ago.

“The first half of 2018 has performed very well with the number of year to date residential sales almost identical to this time last year,” states Ralph Shaw, Ottawa Real Estate Board President. “Condo unit sales have led the way, increasing by 16.8 per cent over the same period.”

“The robust condo numbers are likely fueled by lack of inventory, particularly in the lower price points of the single-family resale market. For example, in the first half of the year there has been a decrease of 37 per cent in the number of single-family units sold at the $250-275K price point and a 41 per cent decrease for the $275-300K price range, whereas there is a corresponding increase in condo sales of 49 per cent and 22 per cent respectively for those same price points,” Shaw points out.

“This suggests that at the lower end of the single-family resale market, buyers are turning towards condominium units as a way of achieving ownership at a price they can afford. The oversupply in our condo market that once was an issue is now helping to ease our overall inventory shortage.”

“Further, with construction costs up (concrete is one example) as well as increasing development fees, and skilled labour at a premium which is extending build timelines, the price of purchasing a new build is simply out of reach for many entry-level buyers,” he adds. “The options then become to move further outside the urban boundary to less expensive markets in surrounding communities.”

The year to date average Days on Market (DOM) for residential homes has decreased 18 per cent from 46 days in 2017 to 37 days currently. For condos, the DOM has decreased from 71 days to 52 days, a 27 per cent decrease from June 2017.

“The decrease in DOMs indicates that inventory is turning over much more quickly, likely due to the lack of available inventory in certain areas of Ottawa. To increase the number of listings available, we need the right product availability to entice sellers to give up their homes, particularly boomers. Many have indicated they would happily list their homes if we could offer them a property that fits into the lifestyle that they want. The downtown apartment condo is not at the top of their list,” remarks Shaw.

The average sale price of a residential-class property sold in June in the Ottawa area was $449,200, an increase of 3.4 per cent over June 2017. The average sale price for a condominium-class property was $293,303, an increase of 1.2 per cent from June 2017. Year to date, residential properties have seen a 5.2 per cent increase in average price with a 1.1 per cent price increase for condominiums.*

“Ottawa’s real estate market continues to move forward at a reasonable pace. Undoubtedly, inventory remains low, but our property prices continue to be stable and affordable. We are very fortunate not to be experiencing the volatility of other markets in our country,” Shaw acknowledges.

In addition to residential and condominium sales, OREB Members assisted clients with renting 1,320 properties since the beginning of the year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Ottawa’s Spring Market Churning Along

June 5, 2018

Members of the Ottawa Real Estate Board sold 2,279 residential properties in May through the Board’s Multiple Listing Service® System, compared with 2,294 in May 2017, a decrease of 0.7 per cent. The five-year average for May sales is 2,041. May’s sales included 485 in the condominium property class and 1,794 in the residential property class.

“Although our overall inventory stock is down in both the residential and condo market, the number of listings coming onto the market this month is typical spring activity,” states Ralph Shaw, President of the Ottawa Real Estate Board. “The sheer number of home sales that took place in May indicates that inventory is turning over quickly– certainly a sign that Ottawa is a healthy real estate market.”

The average sale price of a residential-class property sold in May in the Ottawa area was $464,401, an increase of 6.3 per cent over May 2017. The average sale price for a condominium-class property was $281,247, an increase of 3.4 per cent from May 2017.*

“In the first five months of 2018, the value of a single-family home has increased about 8% and approximately 6.5% for condominiums,” Shaw notes. “This price acceleration is encouraging news for homeowners who have now seen an average of 3% price growth per year for the last five years.”

“Much of the total increase in property values have been experienced since the beginning of this year. Not only will this help new homebuilders validate their pricing since construction costs and development fees are so high, but it also will give baby boomers incentive to sell their homes which will help put inventory back onto the market,” he explains.

“While our inventory stays at historically low levels, especially in some neighbourhoods, there will continue to be upward pressure on home prices. We definitely have the demand for housing in this city not only because it is still very affordable but because all the fundamentals are solid here.  However, our city does need to have a longer-term housing supply strategy so that we aren’t confronted with future affordability challenges,” Shaw advises.

The $300,000 to $449,999 range remains the most active price point in the residential market, accounting for 45 per cent of home sales, while the $500,000 to $750,000 range continues to gain momentum, now representing almost one-quarter of residential home sales.

“Between $150,000 and $249,999 was May’s most active price point in the condominium market, accounting for 49 per cent of the units sold,” Shaw reports. “Moreover, apartment condos represent 52 per cent of the sales. This is likely a reflection of the low vacancy rate in the rental market. If you can scrape together a down payment, the carrying costs of one of these condos should be less than renting,” he suggests.

In addition to residential and condominium sales, OREB Members assisted clients with renting 1,020 properties since the beginning of the year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Hot Market in an Icy April

May 3, 2018

Members of the Ottawa Real Estate Board sold 2,032 residential properties in April through the Board’s Multiple Listing Service® System, compared with 1,788 in April 2017, an increase of 13.6 per cent. The five-year average for April sales is 1,704. April’s sales included 416 in the condominium property class and 1,616 in the residential property class.

The average sale price of a residential-class property sold in April in the Ottawa area was $455,212, an increase of 4.2 per cent over April 2017. The average sale price for a condominium-class property was $269,294, an increase of 0.3 per cent from April 2017.*

“Full employment and reasonable house prices in proportion to incomes are fueling our market. Ottawa is not only a beautiful and dynamic capital but also one of the more affordable cities in Canada,” observes Ralph Shaw, Ottawa Real Estate Board President. “While prices and conditions do vary by area, the overall residential marketplace shows solid and steady performance on investment for homeowners, and offers a variety of property class options and price points for those looking to enter the market,” he advises.

“While sales were strong this month, certain areas in Ottawa continue to experience limited supply with both condo and residential inventory down 23.7% from the same month last year. With our low inventory, potential sellers are reluctant to put their home on the market if they are uncertain of their ability to acquire another property.”

“April’s colder than usual temperatures may have been one of the reasons potential sellers delayed listing their properties. However, there are other factors at play which are contributing to the lack of supply. Of course, the new mortgage stress test is affecting some homeowners who may no longer qualify to upsize their homes,” Shaw points out.

“Further compounding the issue within Ottawa proper is a restricted supply of serviceable land, and thus fewer new build opportunities. We need both the new build and resale inventory to be robust enough to meet demand on a consistent basis,” he explains.

“Moreover,” Shaw elaborates, “life adjustment sellers such as Boomers, lack suitable purchasing options due to urban engineering. Many of them do not want to live in downtown condominiums, preferring smaller homes with an attached garage and a decent sized yard where they can still host family BBQs and entertain. Our city council would benefit from the input of Ottawa’s long-serving REALTORS® who truly understand the variety of needs of local home buyers and sellers,” Shaw concludes.

In addition to residential and condominium sales, OREB Members assisted clients with renting 770 properties since the beginning of the year.

The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

Buyers Get a Jump on the Spring Market
April 5, 2018

Members of the Ottawa Real Estate Board sold 1,660 residential properties in March through the Board’s Multiple Listing Service® System, compared with 1,478 in March 2017, an increase of 12.3 per cent. The five-year average for March sales is 1,339. March’s sales included 358 in the condominium property class and 1,302 in the residential property class.

“Inventory continues to fall below normal average, but we are still seeing more sales than last year because listings are not staying on the market,” states Ralph Shaw, President of the Ottawa Real Estate Board. “Properties that are priced well are selling quickly with days on market dropping to an average of 43 days from an average of 54 days on market in March 2017.”

The average sale price of a residential-class property sold in March in the Ottawa area was $447,561, an increase of 8 per cent over March 2017. The average sale price for a condominium-class property was $275,592, an increase of 0.7 per cent from March 2017. The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

“The most active price point in the residential market continues to be the $300,000 to $449,999 range, accounting for 46 per cent of the market. In addition, the $500,000 to $750,000 market is a price point that is showing robust growth representing 21 per cent of the residential homes sold in March,” Shaw acknowledges.

“In the condominium market, between $175,000 and $274,999 is the most buoyant price point, accounting for 51 per cent of the market. We continue to believe it is due to low interest rates and the lack of supply of rental inventory pushing renters into the market,” he adds.

“Overall, as a result of the stable pricing in the condominium market and reasonable increases of 8 per cent in the residential market, Ottawa continues to be a healthy and vibrant real estate market,” Shaw concludes.

In addition to residential and condominium sales, OREB Members assisted clients with renting 551 properties since the beginning of the year.

Wanted: Ottawa Homes for Sale
March 5, 2018

Members of the Ottawa Real Estate Board sold 979 residential properties in February through the Board’s Multiple Listing Service® System, compared with 1,002 in February 2017, a decrease of 2.3 per cent. The five-year average for February sales is 922. February’s sales included 250 in the condominium property class and 729 in the residential property class.

“There is no doubt our sales numbers would have been much higher if we had more properties available for sale. Buyer demand is there, but our inventory in both residential-class and condos continues to decline. This is creating a supply side issue in the Ottawa real estate market,” concludes Ottawa Real Estate Board President, Ralph Shaw. “If this trend continues, the market will move to favour sellers, and buyers will find themselves competing for a limited number of listings.”

“Compounding the supply issue is the fact that after a record year last year, new construction is hindered getting to market because builders just cannot find enough land as a result of the urban boundary and land prices going up,” Shaw points out. “Given this environment, it’s a good opportunity for Sellers to get their property on the market,” he advises.

The average sale price of a residential-class property sold in February in the Ottawa area was $429,600, an increase of 2.7 per cent over February 2017. The average sale price for a condominium-class property was $273,174, an increase of 5.6 per cent from February 2017. The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

“The most active price point in the residential market continues to be the $300,000 to $449,999 range, accounting for 47 per cent of the market. While the most active price point in the condo market, between $150,000 and $249,999, accounts for 56 per cent of the market,” Shaw notes.

“The reality is that condo sales are driving the number of properties sold at the moment. Due to demand, the condo market is experiencing some price recovery. Units in the lower price points of the condo market are likely moving rapidly because of the limited supply in the rental market which is yet another factor at play. The lack of availability is essentially forcing renters into condo ownership,” he explains.

“Ottawa is beginning to experience similar indicators that have ultimately led to challenging real estate markets in our larger metropolitan cities. It starts with supply shortages which eventually lead to affordability issues. The city in particular needs to have an intelligent vision about how to support and stimulate all aspects of the market from new construction through to the rental market availability,” Shaw elaborates.

“With this being a civic election year, we look forward to talking with our council and mayoral candidates about what measures need to be taken now to support affordability, before we develop the supply challenges of Toronto or Vancouver,” he cautions.

In addition to residential and condominium sales, OREB Members assisted clients with renting 348 properties since the beginning of the year.

Low Inventory Could Leave Some Buyers Out in the Cold

February 5, 2018

Members of the Ottawa Real Estate Board sold 712 residential properties in January through the Board’s Multiple Listing Service® System, compared with 664 in January 2017, an increase of 7.2 per cent. The five-year average for January sales is 638.

“While January is typically the month we see the lowest number of listings come onto the market, the numbers for this month are very low,” Rick Eisert, 2017 President of the Ottawa Real Estate Board, observes. “The five-year average for new listings in January is 1,396 for residential and 500 for condominiums. January 2018’s listings were at 994 and 406 respectively.”

“We saw this trend throughout 2017, and the result is our resale market is being challenged by decreasing supply in both the residential and condo markets. Furthermore, as the supply continues to be reduced, it will tend to put an upward pressure on prices. This is simple supply and demand economics,” he adds.

The average sale price of a residential-class property sold in January in the Ottawa area was $427,487, an increase of 8.8 per cent over January 2017. The average sale price for a condominium-class property was $263,744, a decrease of 8.6 per cent from January 2017. The Board cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

January’s sales included 173 in the condominium property class and 539 in the residential property class.

“Sales in the residential property class this month were on par with January 2017 with a minor decrease of 1.1 per cent. Unit sales in the condo market, however, have seen an increase of 45 per cent from 119 units sold in January 2017 to 173 units in January 2018,” Eisert explains.

“The most active price point in the residential market is the $300,000 to $449,999 range, accounting for 47.5 per cent of the market. While the most active price point in the condo market, between $150,000 and $249,999, accounts for 55 per cent of the market,” states Eisert. “There is a marked increase in the number of condo units sold in the lower end of the market specifically. This is likely due to the attractive lower price point and the fact that the demand is there.”

“For homeowners thinking of selling, this is a good time to get your property on the market before spring,” Eisert advises. “Since inventory is currently low, sellers will certainly get attention because selection for buyers in some areas, in particular, is quite limited.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 166 properties since the beginning of the year.

A Strong Finish for Ottawa’s Real Estate Market in 2017

 

January 4, 2018

Members of the Ottawa Real Estate Board sold 771 residential
properties in December through the Board’s Multiple Listing Service® System, compared with 711 in December 2016, an increase of 8.4 per cent. The five-year average for December sales is 687.

December’s sales included 205 in the condominium property class and 566 in the residential property class. The average sale price of a residential-class property sold in December was $434,098, an increase of 3.4 per cent over December 2016. The average sale price for a condominium-class property was $255,335, a decrease of three per cent from December 2016.

“December saw an increase of 3.5 per cent in the number of units sold in residential sales and 25 per cent in condo sales. This could very well be attributed to the changes in the mortgage qualification rules implemented January 1, 2018,” speculates Ralph Shaw, 2018 President of the Ottawa Real Estate Board.

“2017 was another solid year for the Ottawa Real Estate market in both the number of transactions as well as the reasonable increase in prices, about seven per cent in residential and three per cent in the condo market,” Shaw acknowledges. “We continue to have a stable and balanced market. Although inventory tracked low all year and new listings were down each month, new home supply counteracted the impact somewhat.”

The total number of residential and condo units sold through the Board’s MLS® System throughout all of 2017 was 17,083, compared with 15,526 in 2016, an increase of ten per cent. Overall, residential sales volume was up 16 per cent.

“In 2017, the condo market rebounded with a 22 per cent increase in the number of units sold, which is quite significant. The relatively flat increase in prices suggests that we found the ideal price point in which to move the units,” Shaw concludes. “As for residential sales, there was a good availability of product under $500,000 considering almost 10,000 out of approximately 13,500 residential units sold fell in that range.”

2017’s average residential sale price was $425,063, an increase of 6.8 per cent over 2016, while the average condominium sale price was $269,903, an increase of 3.4 per cent over 2016. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

When asked for a 2018 forecast regarding the new mortgage rules stress test, Shaw points out, “One factor that will soften the blow of the new mortgage rules is Ottawa’s average price point in the $400,000s, which means our market will certainly fare better than those in Toronto or Vancouver.”

“Nevertheless,” he cautions, “we will continue to monitor the impact of the stress test. It is unlikely that we will truly see the results of this poorly conceived piece of legislation until the end of the second quarter.”

In addition to residential and condominium sales in 2017, OREB Members have assisted clients with the sale of 419 commercial properties and 20 farms units, as well as with the rental of 2,977 properties.

The Advantage of Getting Pre-Approved

One of the best things you can do to ensure you get the home you want is to arrange for financing before you go shopping. This is often referred to as getting “pre-approved”.

Getting pre-approved simply means that your lender has calculated how much of a mortgage they’re willing to offer you, depending on your down payment and current financial situation.

There are two advantages to having a pre-approved mortgage. First, you know exactly what you can afford when shopping for a new home. Second, when you make an offer, you’re likely to be taken more seriously.

Buying a Home That Needs Work

When you’re shopping for a new home, you may come across properties that require repairs or renovations. Are these houses worth the added expense? Will you get your money back if you decide to sell the house in the future?

According to market studies, certain renovations and repairs do add more value to a home than the repairs typically cost. These include kitchen and bathroom renovations, new or improved landscaping, and electrical and plumbing repairs.

New Mortgage Rules 2018: A practical guide.

Come Jan. 1, 2018, Canadians getting, renewing or refinancing a mortgage might have to prove that they would be able to cope with interest rates substantially higher than their contract rate.

New rules by Canada’s federal financial regulator announced in October mean that even borrowers with a down payment of 20 per cent or more will now face a stress test, as has been the case since January of 2017, for applicants with smaller down payments who require mortgage insurance.

Ottawa has already moved to tighten the rules around the mortgage market six times since July 2008, with a series of regulatory tweaks aimed at limiting the amount of debt that Canadians and financial institutions take on.

This is the seventh turn of the screw — and it could have a big impact.

Some 10 per cent of Canadians who got an uninsured mortgage between mid-2016 and mid-2017 would not have qualified under the new standards, a recent analysis by the Bank of Canada suggested.

To put a number on it, the rules will likely affect about 100,000 homebuyers, who would qualify for a mortgage for their preferred house today but will likely fail the stress test for an equally large loan next year, according a report published by Mortgage Professionals Canada, an industry group.

Here’s how the new guidelines might affect you:

IF YOU’RE PLANNING TO BUY A HOUSE WITH A DOWNPAYMENT OF 20 PER CENT OR MORE NEXT YEAR.

The stress test means that financial institutions will vet your mortgage application by using a minimum qualifying rate equal to the greater of the Bank of Canada’s five-year benchmark rate (currently 4.99 per cent) or their contractual rate plus two percentage points.

If you’re going be house-hunting next year, this may force you to settle for a less expensive home than you would be able to buy today. Or, you might have to wait and save up for a larger down payment.

The rules might force Canadians to set their eyes on homes that are up to 20 per cent cheaper. But since few homebuyers are stretching their finances to the limit when applying for a mortgage, the average target price reduction will likely be smaller, $31,000, or 6.8 per cent, according to Will Dunning, chief economist at Mortgage Professionals Canada.

Of the 100,000 or so prospective home buyers that will hit a snag because of the stress test next year, Dunning estimates that about half will be able to make a different purchase than they had planned. The rest will give up on a home purchase.

IF YOU’RE RENEWING YOUR MORTGAGE NEXT YEAR

Lenders don’t have to apply the stress test to clients renewing an existing mortgage.

This means that if you fail the stress test, you’ll probably get stuck renewing with your current financial institution, without being able to shop around for a better rate.

In some cases, “renewing borrowers may be forced to accept uncompetitive rates from their current lenders,” Dunning noted.

IF YOU’RE REFINANCING YOUR MORTGAGE

If you’re planning on refinancing your mortgage, you’ll have to qualify according to the higher stress-state rates rather than your existing contractual mortgage rate, explained James Laird, president at Toronto-based CanWise Financial.

Say, for example, that you bought a $400,000 home and have a $100,000 mortgage balance left. You’d like to borrow $50,000 more for a renovation. You have a five year fixed-rate mortgage at 3.3 per cent.

Today, your lender would make sure that you can take on a $150,000 loan at 3.3 per cent, said Laird.

Starting next year, your financial institution would have to vet that $150,000 loan using a 5.3 per cent rate. If you’re close to the borrowing limit today, you might have to settle for a smaller loan.

FOUR CASES IN WHICH THE RULES LIKELY WON’T AFFECT YOU

As they generally do, financial regulators have allowed for measures that will ease the transition, making sure the new rules don’t disrupt transactions that are underway by not yet completed in early 2018.  If you sign a purchase agreement on a new home before Jan. 1., lenders won’t have to apply the stress test even if you apply for a mortgage in the new year, said Laird.

This holds for pre-construction sale and purchase agreements, too, he added.

“Usually there’s eventually a cutoff,” said Laird, though in this case it’s not yet clear when that will be.

If you are pre-approved for a mortgage, some lenders will give you 120 days starting Jan. 1 to buy your new home without worrying about the new rules.

The same holds for mortgage refinancing. If you have a mortgage refinance commitment in place by Dec. 31, you have 120 days to follow suit, said Laird.

Of course, the stress test won’t have much of a concrete impact on you if you pass it. Borrowers with plenty of spare financial capacity will be able to go about their business.

ABOUT CREDIT UNIONS

The Office of the Superintendent of Financial Institutions (OSFI) rules only apply to federally regulated financial institutions, meaning Canadians might be able to continue borrowing without a stress test if they turn to provincially-regulated credit unions.

In the past, however, credit unions have voluntarily adopted new federal standards on mortgage rates “pretty quickly,” said Laird.

Still, adopting rules on a voluntary basis means they would be able to make some exceptions, he added.

The stress test measures only one of three risk metrics lenders look at, said Laird. Essentially, it ensures that borrowers’ housing expenses compared to their income remain below a certain threshold even if rates rise.

But when evaluating a borrower, financial institutions also look at the size of the loan compared to the price of the house, as well as credit scores.

A credit union that has voluntarily adopted the stress test, might make an exception for a family with very strong credit scores and a down payment considerably higher than 20 per cent, even if they fail to qualify under the new rules by a small margin, said Laird.

By Erica Alini National Online Journalist, Money/Consumer Global News

When your moving date keeps moving...


Buying a new home or condo requires a lot of patience. At first there’s that rush of excitement as you pick out your floor plan and finishes and sign your purchase agreement – but then, you wait. And wait. And wait.

As the months pass, you might wonder how long is too long to wait for your moving day? And who decides?

A builder may sell homes or condos in a new development long before they break ground. Construction can take anywhere from a year to a few years from the time you signed on the dotted line.

It’s important to know that your moving date will depend upon many different factors – some that may be within the builder’s control (e.g. construction scheduling) and some that may not (e.g. strikes, natural disasters, fires). Depending upon the circumstances, if your home is not completed on time, you may be eligible for compensation.

To determine when you may be able to move in, you should consult the Addendum on your Agreement of Purchase and Sale (APS). Depending upon whether you are buying a home or a condo, the information will be a bit different and so is the amount of flexibility the builder has to change the dates.

Condos:

  • The Occupancy Date is characterized as either “Firm” or “Tentative”. This is the builder’s first and best estimate for when your condo will be ready for occupancy. The builder is allowed to extend a tentative occupancy date multiple times with 90 days’ written notice. Once the builder finishes the roof on the building, however, they must send a notice within 30 days – either setting a firm occupancy date or a final tentative date (which can then only be extended once by up to 120 days with 90 days’ notice). Once a firm occupancy date is established, the builder must pay delayed closing compensation for any further unilateral extensions (except for “unavoidable delays”).
  • The Outside Occupancy Date is the builder’s estimate for completion in the event there are unexpected delays. This is a date the builder cannot move unilaterally and because it is a firm commitment, it is also usually set years in the future.
Freehold homes:
  • The Statement of Critical Dates (part of the addendum to the APS) will set a Closing Date that is either “Firm” or “Tentative”.   The First Tentative closing date can be extended up to 120 days to a Second Tentative Closing Date with 90 days’ written notice. The Second Tentative Closing Date can then be extended again up to 120 days to a Firm Closing Date with 90 days’ written notice.
  • The Outside Closing Date is calculated as 365 days from either the Second Tentative or the Firm Closing Date, whichever is earlier.

Upon completion, the builder must obtain an occupancy permit for the home before you will be allowed to move in. It’s important to note that it is up to a municipality’s building inspectors to determine when a new home or condo development is suitable for occupancy, not Tarion.

So where does that leave you if your occupancy or closing date has come and gone and you are still not living in your new home?

The good news is that you may be eligible for delayed closing compensation if your builder has failed to complete your home according to the agreed upon date and/or has not properly notified you of an extension in your occupancy or closing date. The compensation is $150 per day for living expenses (no receipts required), plus other costs caused by the delay (receipts required), up to a maximum of $7,500. The builder is responsible for providing delayed closing compensation, but if they are unwilling or unable to do so, Tarion will step in.

Before you sign your purchase agreement, you should have a real estate lawyer review the agreement for provisions like delayed closing compensation. If you have already bought a home or condo and are concerned about your closing date, you can visit Tarion.com to learn more about delayed closing compensation or contact Tarion via phone 1-877-9-TARION or email customerservice@tarion.com.