July 2022 Newsletter

Aug 1

We’ve had our heads down and focused on helping our clients understand what’s going on in our city and country as the news pushes out plenty of stories about a changing market. Read below to learn more!

A visit from Peter Trevisan

Peter visited us from TD to give us a rundown on the changing interest rates and how they impact mortgage owners and first-time home buyers. He explains that the reason these hikes feel so high is because we saw such a drastic drop in interest rates during the beginning of the COVID pandemic. He broke down variable rates and fixed rates with us and consulted about different ways we help our clients find their dream homes even when the interest rates are changing fast.

Peter worked with us to write all of this down in a blog post, be sure to check it out: HERE

BOC Interest Rate Increase

The Bank of Canada has raised the interest rate up 100pts to 2.5%. This is the highest rate hike we have seen in Canada since 1998, but the rate itself is actually very similar to pre-covid levels. Although this is an adjustment, it is expected, as our economy returns to normal post-covid-lockdowns. To learn more about how the interest rate is changed and why, read the blog post HERE

Are interest rates impacting the Ottawa condo market?

We spoke with our agent Mitch Mackenzie about how interest rates may or may not be impacting the condo market in Ottawa. From what we’ve seen, Mitch explains that as long as a condo is reasonably priced, they seem to be selling at the same rate through June and July.

Read the blog post: HERE

News in Ottawa

Condo Price Review for 2022 Thus Far

Reviewing the prices of condos for the beginning of this year, we can see that prices are rising and selling faster compared to 2021. This, according to Mitch, is because as freehold homes become more expensive, condos are the only viable option for first-time home buyers to purchase a home. They will maintain their value because of this.

Learn more: HERE

What is housing inventory?

Housing inventory is something you may have heard a lot about in the past years as we are currently in a “seller’s market.” Housing inventory is a calculated number that represents the number of months or days it would take to completely sell all the homes that are currently listed for sale. You calculate this by dividing active listings in a period by the number of sales in that same period. Less than 120 days is a seller’s market, more than 180 days is a buyers market, and anywhere in between is a balanced market.

Learn more: HERE

What to consider before purchasing an older condo

Lots of condos in Ottawa were built before the 1980s, and that doesn’t necessarily make them a worse investment than a new build. In this blog post, we dig into some of the benefits of older condos, as well as some of the cons.

Learn more: HERE

Neighbourhood Monthly Statistics

This month, Ottawa real estate agents sold 1110 residential properties. This is down 35% from this month last year, when agents sold 1718. 840 of these were residential properties (a 36% decrease) and 270 were condos (a 34% decrease). This is also greatly below the 5 year average of 1691 properties sold in the month of June.

Penny Torontow explains that this is a major slowing of our real estate market. Buyers are even less motivated to buy than the usual ‘summer lull’ we see in a typical year. She explains that the interest rate hikes as well as other factors are contributing to buyers wanting to ‘wait and see.’ Torontow explains this isn’t necessarily a bad thing though, because as more homes hit the market and less buyers are motivated to buy, we’re getting closer to a balanced market.

Listings added to the market are very regular compared to the 5 year average and only a slight decrease from last July, when the market was booming. This has boosted our inventory of residential properties to 2.9 months and condos to 2.5 months. We’re moving quickly towards a balanced market, which would mean 4 months of inventory.

Average prices are still increasing, 1% from last year in condominiums and 5% from last year in residential homes. This is a significantly slower increase than previous years though, where we were seeing double-digit percentage increases year over year.

Sellers must prepare to be more patient as days on market return to typical lengths. Buyers have more choice and less pressure to buy. Because of this, they may be touring more houses and taking more time to make their decisions. Rising costs of just about everything also means more buyers are taking a breath to evaluate their finances in this changing world before making offers.

In contrast, rentals are up significantly, with Ottawa agents renting out 3528 properties year to date, compared to 2706 the previous year.

To learn more, check out our full blog post HERE