Archives for Ottawa real estate

It’s hard to believe November is over but here we are!  If you’ve been following Ottawa real estate you’ll know it’s been a busy 2017 and December will likely be no exception.  With the new mortgage rules coming into play in a few short weeks, many buyers are motivated to have firm deals completed before January 1st, 2017.

We’ve included the latest news release from the Ottawa Real Estate Board below.  Please note: 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.  We have access to current statistics and trends in our neighbourhoods and communities, it’s our job to stay on top of the market trends!  We have up to date Real Estate Market Reports readily available for you and we love to chat real estate – contact us anytime!

Ottawa Real Estate Stats graph from oreb

Ottawa Real Estate Overall Stats and highlights

Ottawa Real Estate Update | Latest News and Highlights in the Ottawa and Area Real Estate Market

OTTAWA, Dec. 5, 2017 – Members of the Ottawa Real Estate Board sold 1,239 residential properties in November through the Board’s Multiple Listing Service® System compared with 992 in November 2016, an increase of 24.9 per cent. The five-year average for November sales is 1,001.

“November numbers are upholding the robust year we have been experiencing in the real estate market in 2017,” Rick Eisert, President of the Ottawa Real Estate Boards states. “Both residential sales and condo sales continue to steadily increase.”

November’s sales included 294 in the condominium property class and 945 in the residential property class. “This is not surprising though,” Eisert remarks.

“The Office of the Superintendent of Financial Institution’s (OSFI) announcement regarding the new stress tests for low- ratio borrowers may have buyers rushing into the market before the stricter mortgage regulations come into play in January 2018. If this keeps up, I expect December could be a busier than usual holiday season for REALTORS®.”

The average sale price of a residential class property sold in November in the Ottawa area was $418,354, an increase of 3.2 per cent over November 2016. The average sale price for a condominium-class property was $257,212, a decrease of 7.6 per cent over November 2016. The Board cautions that the average sale price 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 calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

“It is crucial in a market that is moving quickly, such as the one we are experiencing, to ensure you are pricing your property correctly. Having the guidance and market knowledge of a REALTOR® is essential for home buyers and home sellers,”

suggests Eisert. “The most active price point in the residential market is the $300,000 to $450,000 range, accounting for 46 per cent of the market. While the most active price point in the condo market, between $150,000 and $275,000, accounts for 66 per cent of the market,” says Eisert. “In addition to residential and Condominium sales, OREB Members assisted clients with renting 2,821 properties since the beginning of the year.”

It’s hard to believe November is over but here we are!  If you’ve been following Ottawa real estate you’ll know it’s been a busy 2017 and December will likely be no exception.  With the new mortgage rules coming into play in a few short weeks, many buyers are motivated to have firm deals completed before January 1st, 2017.

We’ve included the latest news release from the Ottawa Real Estate Board below.  Please note: 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.  We have access to current statistics and trends in our neighbourhoods and communities, it’s our job to stay on top of the market trends!  We have up to date Real Estate Market Reports readily available for you and we love to chat real estate – contact us anytime!

Market Snapshot-November 2017-DRAFT

Ottawa Real Estate Update | Latest News and Highlights in the Ottawa and Area Real Estate Market

OTTAWA, Dec. 5, 2017 – Members of the Ottawa Real Estate Board sold 1,239 residential properties in November through the Board’s Multiple Listing Service® System compared with 992 in November 2016, an increase of 24.9 per cent. The five-year average for November sales is 1,001.

“November numbers are upholding the robust year we have been experiencing in the real estate market in 2017,” Rick Eisert, President of the Ottawa Real Estate Boards states. “Both residential sales and condo sales continue to steadily increase.”

November’s sales included 294 in the condominium property class and 945 in the residential property class. “This is not surprising though,” Eisert remarks.

“The Office of the Superintendent of Financial Institution’s (OSFI) announcement regarding the new stress tests for low- ratio borrowers may have buyers rushing into the market before the stricter mortgage regulations come into play in January 2018. If this keeps up, I expect December could be a busier than usual holiday season for REALTORS®.”

The average sale price of a residential class property sold in November in the Ottawa area was $418,354, an increase of 3.2 per cent over November 2016. The average sale price for a condominium-class property was $257,212, a decrease of 7.6 per cent over November 2016. The Board cautions that the average sale price 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 calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

“It is crucial in a market that is moving quickly, such as the one we are experiencing, to ensure you are pricing your property correctly. Having the guidance and market knowledge of a REALTOR® is essential for home buyers and home sellers,”

suggests Eisert. “The most active price point in the residential market is the $300,000 to $450,000 range, accounting for 46 per cent of the market. While the most active price point in the condo market, between $150,000 and $275,000, accounts for 66 per cent of the market,” says Eisert. “In addition to residential and Condominium sales, OREB Members assisted clients with renting 2,821 properties since the beginning of the year.”

What home buyers need to know before 2018

As of January 1, 2018, Canadian homebuyers will have to meet stiffer requirements in order to qualify for a mortgage with a federally regulated mortgage lender.

Why are the Mortgage Rules changing?

  • As Canada’s financial “watchdog” OSFI believes these new rules will decrease the risks for Canadian households with significant debt if and when the interest rates rise.

Are you a Confused by the upcoming changes to the mortgage rules? Don’t panic.

Our very own Kent Browne, Owner and Broker at Royal LePage Team Realty, sat down with Mortgage Broker York Polk  of Mortgage Alliance to discuss all these changes in order to help you, our clients, understand how they may affect you.

Here are the highlights:

Changes that came into effect November 30, 2016 and still apply:

  • All buyers having a down payment of less than 20% are required to pass a “Stress Test”* to obtain a mortgage.
  • To pass the stress test, buyers with a payment of less than 20% need to qualify at a higher rate (4.64% at the time) even though the contract rate is much lower (2.3% at the time).

Changes starting January 1, 2018

  • When OSFI’s new rules take effect – even those who have down payments of 20% or higher and do not require mortgage insurance – will also have to undergo a “Stress Test”.   Home buyers will need to qualify for mortgages that are two percentage points higher than the rates at which they are applying.
  • The qualifying rate for the “Stress Test” would be the greater of either 2% higher than the contract rate or the Bank of Canada rate (currently at 4.99%).

The contract rate remains unaffected.

If you’re a prospective home buyer concerned about how the new mortgage rules will impact your buying power, here are a few tips:

  • If you are thinking about buying a home, seriously consider buying now. Any firm agreement of purchase and sale on a specific property that has been completed and signed off on will follow the old rules, regardless of the closing date.  Note, if you need to make any changes to the agreement after January 1st, you will need to qualify within the new rules.
  • Conventional mortgages can be stretched over up to 30 years and by doing so, it will be easier to qualify at this time.
  • While home buyers should always get pre-approved, this will not protect you from needing to qualify under the new rules if you are unable to purchase a property before 2018.

Contact your Realtor  and a professional mortgage broker now to ensure that there are no surprises when it comes time to buy a home.  Questions? We’d love to help! Contact us info@teamrealty.ca.

* Stress testing is a best practice risk management tool. Stress tests are not predictions or forecasts­, they involve searching out extreme “what if” scenarios that have a very remote chance of happening, and planning for them.

Diligent stress testing is an essential part of CMHC’s risk management program and allows CMHC to evaluate its capital levels against multiple scenarios. Effectively, they confirm if CMHC’s capital holdings are sufficient for even the most extreme scenarios.

Stress tests are used by financial institutions to gauge how their business would fare under extremely difficult conditions. They provide a formalized mechanism for companies to look at risks and to assess the impact of the different extreme events. This information is from the CMCH article found here.