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Ottawa housing: the hunt for bargains moves to the periphery

Perhaps it was the heat and humidity, but momentum slowed in Ottawa’s housing market in August.

The average price for residential properties sold through the Multiple Listing Service climbed a relatively modest 3.1 per cent year over year to $433,700 while condominiums fetched an average of $276,700, up 2.2 per cent from August 2017, according to a survey of realtors by the Ottawa Real Estate Board.

For residential properties, it was the lowest monthly increase since February. Year-over-year changes in condominium prices have been all over the map this year, ranging from a decline of 8.6 per cent in January to a rise of 5.6 per cent in February.

Condo prices varied hugely depending on the area of the city.  In the downtown core, the average price for a condo sold in August was $362,500, up 5.8 per cent from a year ago, while condos in the east sold for an average $323,000, up nearly 30 per cent — a statistic likely skewed by a few very expensive properties.  Average condo prices actually fell year over year in the west and the south in August. Sellers settled for $328,200 in the west (down six per cent) and $231,800 in the south (a drop of 5.4 per cent).

The relative easing of prices overall in August will be a relief for those entering the housing market. Nevertheless, the dip in growth is something of a surprise in light of declining inventories, which would normally push prices up.  The board reported there were 4,215 active listings for residential properties at the end of August, 15.9 per cent fewer than a year earlier.  Over the same period the number of condominiums listed were 1,476 — down 25.2 per cent. Single-family houses in OttawaRealtors sold nearly 1,200 residential properties in August and roughly 400 condominiums. Prior to sale, residential properties were on the market an average of 42 days compared with 44 days a year earlier, while condos took 50 days to sell, down from 64 days in August 2017.

Board president Ralph Shaw said Ottawa house prices have been somewhat constrained because buyers can still find “reasonably-priced” homes within a 30-minute commute of downtown across most points of the compass.

Certainly this pattern was at play in August. Consider a more detailed look at house prices, using a benchmark developed by the Canadian Real Estate Association and multiple urban real estate boards including that of Ottawa. The benchmark adjusts for variables such as roof quality, the number of bathrooms and other house characteristics in an effort to identify underlying price trends.

The board calculated that the average benchmark price of single family homes sold in Ottawa in August was $429,400 compared to $398,400 in the same period a year earlier, up nearly 8 per cent.

Within the 46 real estate districts that cover greater Ottawa, most of the sharpest increases in house prices year over year took place in the western and southern periphery, which suggests people really are moving outside the core in search of more attractive prices.

Among the districts reporting the biggest gains in house prices were Barrhaven (up 9.9 per cent to nearly $400,000), Stittsville (up 9.4 per cent to $483,200), Kanata (up 9.1 per cent to $445,500).

The top gaining district, going against the trend, was Hintonburg-West Centretown, where the benchmark price for single family homes was $547,900 — up 11.3 per cent compared with August 2017.

Interestingly the two districts immediately to the west (south of the Ottawa River between Parkdale Avenue and Churchill Avenue) reported house price gains among the lowest in the city last month. A factor here could be price resistance.  Single family homes last month were benchmarked at $684,100 in Ottawa West-Tunneys Pasture, and $634,800 in Westboro-Hampton Park.

For much of the past year or so, these districts have registered among the highest gains in house prices, but may now be at levels that are prompting people to look further afield, whether it’s just to the east in Hintonburg or on the city’s periphery.