Thursday, January 26, 2017
2017 Ottawa Market update
The market in Ottawa tends to be pretty steady and does not have a lot of ups and downs. Last year, Ottawa sold over 15,000 homes, for the first time ever. Kind of like the Dow breaking 20,000, the market here broke a psychological barrier, as we have been mired in 14,000 plus sales for many years.
It really was a tale of two years in Ottawa in 2016 - the first 5 months of the year were average at best and in June the market really started to pick up with volume of sales record months through most of the summer and fall. Average price for the year was up, average days on market are dropping; which are usually signs of a market heading back towards as Seller's market.
We are seeing a large uptick in traffic from Toronto. Prices there have gotten very high and we are getting inquiries here from first time buyers, up through to downsizers. With demographics showing the increasing age of Baby Boomers, coupled with the fact that Ottawa has the highest percentage of Baby Boomers per capita of any city in Canada, we should be seeing more sales of suburban homes and increased urbanization of the core areas.
The four major post secondary schools in Ottawa boast over 138,000 students. Efforts are being made to increase foreign students with their $26,000 annually tuition, which is about 5 times the cost of an Ontario student. The Ottawa Light Rail Transit system is due to be completed and operational in 2018. Phase 2 path has been planned out and is planned for operation in 2023. This is a huge capital project which should increase property values and increase rents by about 10% monthly.
Overall, the Ottawa market has gone through a difficult time over the past 4 years (since July 2012). The market showed signs of strength summer 2016 onward and this trend should continue. The increased spending on infrastructure planned by the Liberal government will be administered by bureaucrats in Ottawa, which means job growth, which leads to population growth, which leads to real estate prices increasing....
The outlook is positive, but investors need to have a mid to long term view of their investments.