Tighter mort­gage rules may be rais­ing home prices

Ottawa Citizen - - CITY - JAMES BAG­NALL

Tighter mort­gage rules, which be­come ef­fec­tive on New Year’s Day, may be driv­ing up the cost of buy­ing a house in Ot­tawa.

Prices for sin­gle fam­ily homes jumped 7.3 per cent year over year in Novem­ber to reach $403,500, the Ot­tawa Real Es­tate Board re­ported this week.

The price hikes re­flected in part a higher-than-usual sales vol­ume for Novem­ber, which helped to re­duce the num­ber of avail­able prop­er­ties. There were 3,212 res­i­den­tial list­ings at the end of Novem­ber com­pared with 3,745 in Oc­to­ber and 4,207 in Novem­ber 2016.

The tight­ness of the mar­ket can also be gauged by look­ing at how long it took for prop­er­ties to sell. Houses sold in Novem­ber had been on the mar­ket for an av­er­age 48 days, down con­sid­er­ably from 68 days in Novem­ber 2016.

Start­ing in the new year, bor­row­ers must demon­strate, among other things, they can still make pay­ments if in­ter­est rates rise.

The in­crease in sales ac­tiv­ity in Novem­ber did lit­tle to change the pat­tern that has favoured sellers of homes in the west end of Ot­tawa.

Eight of the 10 real es­tate dis­tricts that ex­pe­ri­enced the big­gest price jumps for sin­gle-fam­ily homes were in a nar­row band stretch­ing west along the Ot­tawa River from Is­land Park Drive to the new head­quar­ters for the De­part­ment of Na­tional De­fence.

All of these dis­tricts re­ported dou­ble-digit in­creases year over year. The sweet spot, from the sellers’ point of view, was Car­ling­wood-West­boro (the Woodroffe Av­enue to Churchill Av­enue area) where the bench­mark price for sin­gle-fam­ily homes jumped 12.3 per cent to $757,700.

Not only was that the largest in­crease among the city’s 46 real es­tate dis­tricts, but Car­ling wood West bo roi snow solid ly en­trenched as Ot­tawa’ s third most ex­pen­sive behind Rock­cliffe ($1.5 mil­lion) and New Ed­in­burgh-Lin­den­lea ($770,600) — the two dis­tricts most pop­u­lar with diplo­mats and se­nior man­darins.

Bench­mark prices are based on an in­dex that re­flects mul­ti­ple hous­ing char­ac­ter­is­tics such as roof type and of­fers a more con­sis­tent view of un­der­ly­ing trends than a sim­ple av­er­age.

The small­est in­creases in bench­mark prices for sin­gle-fam­ily homes oc­curred in the east, along the High­way 174 cor­ri­dor from St. Lau­rent Boule­vard to Cum­ber­land. For in­stance, in Black­burn Ham­let, the bench­mark price for sin­gle-fam­ily homes edged up just 2.3 per cent to $389,000 in Novem­ber com­pared with a year ear­lier.

This made it one of 12 dis­tricts in which bench­mark prices were be­low $400,000. The least ex­pen­sive: Carls­bad Springs, where sin­gle­fam­ily homes sold for $332,700, slightly be­low com­pa­ra­ble prop­er­ties in Bells Cor­ners.

The mar­ket for con­do­minium sales in Novem­ber was markedly dif­fer­ent from the one for sin­gle­fam­ily homes. Ac­cord­ing to board data, real es­tate agents sold nearly 300 con­dos in Novem­ber for an av­er­age of $257,200 — down 7.6 per cent year-over-year.

There were sharp vari­a­tions by re­gion. The av­er­age price for a condo sold in the east end rose by 32 per cent year over year to $333,000 while in the west, the av­er­age price fell 2.3 per cent to $300,600 over the same pe­riod.

Down­town, the av­er­age price for a condo sold in Novem­ber was $359,000 — down 17 per cent — while in the south, the price paid was just be­low $230,000, about the same as a year ear­lier.

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