Good news for anyone looking to buy or sell a home in Ottawa. Although there has been a slight decline in comparison with last year, the Ottawa real estate market is still looking healthy and is predicted to remain that way. Ottawa is known for its stable real estate market and 2013 is proving this to be true. With relatively steady unit sales and selling prices, the Ottawa real estate market does not follow the wide variations and fluctuations that are seen in other major urban centres such as Toronto and Vancouver.
While we have seen an increase in condo sales, there has been a minor decrease in single home sales. Seasonal patterns indicate that there will be greater activity this spring to follow the winter slump. Following a 2.5 percent decrease in average sale price, a rebound is imminent; it is also important to bear in mind that average sale price is not indicative of the potential selling price for any individual property.
The decrease in sales and pricing in the Ottawa real estate market may be attributed to the recent changes to mortgage practices that have been established by the federal government. Under the new mortgage rules that took effect in July 2012, the maximum amortization period has been reduced from 30 to 25 years. There has also been a decrease in the maximum percentage of total value that can be financed, dropping from 85 to 80 percent. Tighter restrictions on the maximum amount of monthly household income that can be relegated for mortgage, taxes and utilities have also contributed to fewer applicants being approved for financing. The combination of these changes has resulted in higher monthly mortgage rates, but in the long run the total interest paid will be lower and this ultimately benefits the individual home owner.
The Bank of Canada’s January announcement that they will be keeping their interest rate at one percent, a rate that has held for over two years, can also be expected to bolster the Ottawa real estate market. Lower interest rates on mortgages will help to counteract some of the new federal restrictions and make financing more accessible. The current low interest rates are expected to remain that way for the time being; the Bank of Canada is not scheduled to announce any further rate changes until April 2013.
Other factors are also at play that will contribute to greater activity for the Ottawa real estate market. A predicted increase in employment rates will result in higher sales in the Ottawa area. An expected influx of new residents to the area will also have a favourable impact on the housing market.
Although the beginning of the year has shown a slight advantage to home buyers, this is likely to even out towards the end of the year. The Ottawa real estate market can be expected to remain balanced throughout 2013, making it a perfect time to buy or sell your home.