Ottawa housing market balances as prices rise steadily

After an HST- influenced dip in sales during the earlier part of the summer, the month of August saw a return to a more normal number of sales in the Ottawa resale housing market. Members of the Ottawa Real Estate Board sold 1,122 residential properties in August through the Board’s Multiple Listing Service® system compared with 1,211 in August 2009, which represents a decrease of 7.3 per cent. Sales numbers in this range are common for this time of year, when people go on vacation and it seems like the whole world slows down a bit.

Of those 1,122 sales in August, 266 were in the condominium property class, while 856 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

At the end of August, sales so far for 2010 were slightly ahead of where they were at this point in 2009 (which was the best year on record for sales). The number of homes available for sale has increased as sales have slowed, and Ottawa looks to be shifting to a balanced market, where buyers and sellers are on a level playing field with neither group holding a distinct advantage over the other.

Ottawa resale home prices also continued to increase at a sustainable pace. The average sale price of residential properties, including condominiums, sold in August in the Ottawa area was
$321,969, an increase of 2.1 per cent over August 2009. The average sale price for a condominium-class property was $262,999, an increase of 16.8 per cent over August 2009. The
average sale price of a residential-class property was $340,294, an increase of 0.1 per cent over August 2009. 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.

Speaking of the HST, let me take this opportunity to remind you that the new tax does NOT apply to the purchase price of resale homes, with very few exceptions (such as homes that have been more than 90 per cent renovated). Only items that were previously subject to GST are now subject to HST, and as resale homes were GST-exempt, this exemption continues under the new tax regime. Newly built homes and substantially renovated homes have HST added to their purchase price, and HST applies to certain services associated with the purchase of a home, such as legal fees, real estate commissions, moving fees, appraisals, and renovation services. If in doubt, ask your service provider.

Strategies for buying or selling in a balanced market can be different from those that applied in the seller’s market we experienced prior to the summer – and market conditions can vary widely among neighbourhoods within the Ottawa area. As a member of the Ottawa Real Estate Board, I can help make your buying or selling experience easier and less stressful. Feel free to contact me if you have any questions at all.

The President’s Pen column was prepared by the Ottawa Real Estate Board and first appeared in the (date) issue of the EMC community newspapers.