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Ottawa Real Estate News Release (OREB) – Ottawa’s MLS® Market Gains Momentum Heading into Summer
August 7, 2024
The number of homes sold through the MLS® System of the Ottawa Real Estate Board (OREB) totaled 1,241 units in July 2024. This was a 13.6% increase from July 2023.
Home sales were 7.1% below the five-year average and 8.8% below the 10-year average for the month of July.
On a year-to-date basis, home sales totaled 8,349 units in July 2024 — an increase of 5.5% from the same period in 2023.
“As the market pace typically slows in the summer, July’s activity is encouraging and could be a sign of more gains ahead,” says OREB President Curtis Fillier. “Buyer confidence is slowly but surely catching up while sellers continue to add a steady stream of new listings. Of course, the extent to which that translates into transactions depends on the type of properties and price points available in our communities as supply and affordability issues persist.”
“It’s too early to tell, but recent policy developments could be a boost,” says Fillier. “Two consecutive interest rate cuts by the Bank of Canada, coupled with the federal government’s introduction of 30-year amortization periods on mortgages for first-time homebuyers purchasing newly built homes, will help some buyers. However, these are demand policies and Ottawa — as well as many cities across the country — needs action on the supply side.”
In its Monetary Policy Report, the Bank of Canada points to municipal zoning restrictions and high development fees as long-standing standing challenges to supply growth. Recent data from the Ontario government shows Ottawa is significantly behind its housing starts goal having only built 1,593 homes out of its 12,583 target for 2024. OREB and its member REALTORS® continue to advocate for direct solutions to address the city’s housing crisis, such as allowing four units per lot and reducing costly development fees.
By the Numbers – Prices: The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures.
- The overall MLS® HPI composite benchmark price was $648,900 in July 2024, an increase of 0.1% from July 2023.
- The benchmark price for single-family homes was $734,700, down 0.1% on a year-over-year basis in July.
- By comparison, the benchmark price for a townhouse/row unit was $506,100, up 3.4% compared to a year earlier.
- The benchmark apartment price was $422,800, down 0.9% from year-ago levels.
The average price of homes sold in July 2024 was $679,610 decreasing 2.1% from July 2023. The more comprehensive year-to-date average price was $681,082, increasing by 1.0% from July 2023. The dollar volume of all home sales in July 2024 was $843.3 million, up 11.3% from July 2023.
By the Numbers – Inventory & New Listings
- The number of new listings saw an increase of 17.1% from July 2023. There were 2,231 new residential listings in July 2024. New listings were % below the five-year average and % below the 10-year average for the month of July.
- Active residential listings numbered 3,480 units on the market at the end of July 2024, a gain of 37.0% from July 2023. Active listings were % above the five-year average and % below the 10-year average for the month of July.
- Months of inventory numbered 2.8 at the end of July 2024, up from 2.3 in July 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.
CREA – Canadian Real Estate Association – National Statistics Canadian Housing Activity Perks Up in June
Let’s dive deeper into the Canadian Real Estate Association (CREA) news from July 12, 2024:
- National Home Sales:
- Home sales increased by 3.7% month-over-month in June. This positive trend indicates a stronger demand for residential properties across Canada.
- Factors contributing to this growth may include favorable mortgage rates, economic recovery, and increased consumer confidence.
- New Listings:
- The number of newly listed properties rose by 1.5% compared to the previous month. This suggests that homeowners and sellers are actively putting their properties on the market.
- New listings are essential for maintaining a balanced real estate market, as they provide options for potential buyers.
- Home Price Index (HPI):
- The HPI, which tracks changes in home prices, showed a modest increase of 0.1% month-over-month in June.
- However, the year-over-year comparison reveals a decline of 3.4%. This decline may be influenced by various factors, including regional variations and market dynamics.
- Actual Activity:
- When considering actual (not seasonally adjusted) activity, June 2024 was 9.4% below the activity level recorded in June 2023.
- It’s essential to interpret this data cautiously, as year-over-year comparisons can be affected by exceptional circumstances (such as the pandemic’s impact on the 2023 market).
Royal LePage’s Q2 2024 Home Price Update and Market Forecast
On July 11, 2024 Royal LePage released its Q2 2024 home price update and market forecast. Here are the key points from the national release:
- The national average home price increased by 1.9% compared to the same period last year in Q2 2024, and saw a 1.5% rise from Q1.
- Toronto and Vancouver experienced slower market activity this spring as more properties became available, whereas the demand continued to exceed supply in the Prairie provinces and Quebec.
- Quebec City witnessed the largest annual increase in average home prices among major regions, with a 10.4% rise in Q2.
- Royal LePage projects that national home prices will see a 9.0% increase by the end of Q4 2024, compared to the same quarter last year.
Ottawa Real Estate Newsletter – July 2024
Ottawa Real Estate News Release (OREB) – Ottawa’s MLS® Activity Builds After Recovering from Prior Slowdown
July 4, 2024
The number of homes sold through the MLS® System of the Ottawa Real Estate Board (OREB) totaled 1,439 units in June 2024. This was a marginal increase of 0.1% from June 2023.
Home sales were 7.5% below the five-year average and 13.2% below the 10-year average for the month of June.
On a year-to-date basis, home sales totaled 7,109 units over the first half of the year — an increase of 4.2% from the same period in 2023.
“Ottawa continues to see steady activity as we head into the summer market,” says OREB President Curtis Fillier. “Unlike recent years, buyers have more room to wait, evaluate and be selective when searching for the right property at the right price, leading to a slight uptick in the days on market. Sellers are making moves as evidenced by the inventory and listings. After recovering from last year’s slowdown, Ottawa’s market performance is nearly back on par and continues to make gains.
“It’s going to be an interesting summer and next half of the year. As confidence builds, there will be ample opportunities for both parties. Now is the time for sellers to ensure their property is at its best and priced appropriately to attract buyers who remain slightly reluctant. Buyers would do well to remember that inventory levels — and competition — can swing quickly in Ottawa’s tight market.”
By the Numbers – Prices:
The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures.
- The overall MLS® HPI composite benchmark price was $647,700 in June 2024, a decrease of 0.5% from June 2023.
- The benchmark price for single-family homes was $734,300, down 0.2% on a year-over-year basis in June.
- By comparison, the benchmark price for a townhouse/row unit was $501,500, down 1.6% compared to a year earlier.
- The benchmark apartment price was $420,800, down 1.7% from year-ago levels.
- The average price of homes sold in June 2024 was $686,535 increasing 0.5% from June 2023. The more comprehensive year-to-date average price was $681,345, increasing by 1.6% from the first six months of 2023.
- The dollar volume of all home sales in June 2024 was $987.9 million, up 0.7% from June 2023.
By the Numbers – Inventory & New Listings
- The number of new listings saw an increase of 4.7% from June 2023. There were 2,469 new residential listings in June 2024. New listings were 0.8% below the five-year average and 1% below the 10-year average for the month of June.
- Active residential listings numbered 3,585 units on the market at the end of June 2024, a gain of 45.5% from June 2023. Active listings were 57.8% above the five-year average and 1.9% below the 10-year average for the month of June.
- Months of inventory numbered 2.5 at the end of June 2024, up from 1.7 in June 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.
Capital Gains Tax Changes and an Improved Market: What Cottage Buyers and Sellers Need to Know
With recent changes in the capital gains tax and an improving real estate market, cottage buyers and sellers need to be aware of several key points to make informed decisions. Here’s what you need to know:
Capital Gains Tax Changes
- Understanding Capital Gains Tax: Capital gains tax is levied on the profit made from selling a property. For cottages, this applies to the difference between the sale price and the property’s adjusted cost base (original purchase price plus any capital improvements).
- New Regulations: Recent changes may include increased tax rates, adjusted exemptions, or altered reporting requirements. It’s crucial to stay updated with the latest tax laws and consult a tax professional to understand how these changes specifically impact your situation.
- Primary Residence Exemption: If your cottage qualifies as your primary residence for tax purposes, you may be eligible for an exemption. This can significantly reduce or eliminate capital gains tax. However, specific criteria must be met, so detailed record-keeping of your usage of the property is essential.
Improved Market Conditions
- Market Trends: The cottage real estate market has seen a resurgence, often driven by increased demand for vacation properties and remote working flexibility. Higher demand can lead to increased property values, benefiting sellers.
- Buying Opportunities: For buyers, entering the market during an upswing can mean paying a premium. However, investing in a desirable location can offer long-term benefits, including potential appreciation and rental income.
Tips for Buyers
- Research Locations: Evaluate areas based on factors like proximity to amenities, water access, and potential for appreciation. Look at historical price trends and future development plans.
- Financial Planning: Ensure you have a clear understanding of all costs involved, including purchase price, property taxes, maintenance, and any renovations needed. Secure financing early and consider pre-approval for a mortgage.
- Inspection and Due Diligence: Conduct thorough inspections to uncover any potential issues with the property. This includes assessing the condition of structures, septic systems, and water sources.
Tips for Sellers
- Optimal Pricing: Work with a real estate agent familiar with the cottage market to set a competitive price. Consider getting a professional appraisal to understand your property’s market value.
- Marketing Strategy: Highlight unique features and upgrades. High-quality photos and virtual tours can attract more potential buyers, especially in a digital-first world.
- Tax Planning: Plan for capital gains tax implications. Consider strategies such as spreading the sale over multiple years or leveraging any applicable exemptions.
Conclusion
Navigating the cottage market requires staying informed about tax changes and market trends. Whether buying or selling, professional advice from real estate agents and tax experts can help you make the most of your investment.
New home construction rose while home sales came down in May
In May, new home construction in Canada saw a significant rise, with housing starts increasing by 10% compared to the previous month. This growth was primarily driven by multi-unit projects, such as condominiums, which surged by 13%, while single-unit starts saw a modest increase of 2%. Major contributions came from cities like Montreal and Toronto, which experienced substantial increases in construction activity, whereas Vancouver saw a decrease in new housing starts by 32%.
However, home sales during the same period slightly declined by 0.6%, despite a small increase in newly listed properties. This drop in sales has been attributed to various factors, including higher borrowing costs, economic uncertainties, and policy interventions.
The Bank of Canada’s recent interest rate cut by 25 basis points is anticipated to influence the housing market. Some economists predict that this reduction could encourage more buyers to enter the market, potentially leading to a rebound in home sale.
For further details, you can check the full reports on the CBC and Yahoo Finances.
CREA – The Canadian Real Estate Association – National Statistics / May 2024
The latest statistics from the Canadian Real Estate Association (CREA) indicate a relatively quiet month for the Canadian housing market in May 2024. Here are the key highlights:
- Home Sales: National home sales dipped slightly by 0.6% month-over-month in May 2024. This continues the trend of subdued market activity observed in recent months.
- Listings: The number of newly listed properties inched up by 0.5% from April to May 2024, indicating a modest increase in supply. However, the overall number of properties for sale is still below historical averages despite a 28.4% year-over-year increase in listings.
- Home Prices: The MLS® Home Price Index (HPI) dropped by 0.2% month-over-month and was down 2.4% year-over-year. The actual national average sale price in May 2024 was $699,117, representing a 4% year-over-year decrease.
- Market Balance: The sales-to-new listings ratio eased to 52.6% in May, suggesting a balanced market as this measure falls between 45% and 65%. There were 4.4 months of inventory on a national basis at the end of May, slightly up from 4.2 months at the end of April, indicating an increase in housing supply.
- Regional Variations: While prices remained stable across most of the country, regions such as Calgary, Edmonton, and Saskatoon saw steady price increases since the beginning of the year.
For more detailed information, you can visit CREA’s official statistics page.
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