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Ottawa’s MLS® Market Activity Shows Strong Start to the Year

The number of homes sold through the MLS® System of the Ottawa Real Estate Board totaled 886 units in February 2024. This was an increase of 15.2% from February 2023.

Home sales were 13.8% below the five-year average and 5.7% below the 10-year average for the month of February.

Even with higher prices and the interest rate holding steady, Ottawa is a strong, active market. With metrics across the board up from last year, it’s clear both buyers and sellers are making moves. The metrics, however, don’t tell us about all the people relegated to the sidelines because affordability remains out of reach for many.

The Municipal Property Assessment Corporation (MPAC) recently reported that “communities with homes under $500,000 are becoming increasingly scarce.” A decade ago, 74% of Ontario residential properties had a home value estimate of less than $500,000 but that number has dropped to just 19% today.

REALTORS® know firsthand there is persistent demand for housing in Ottawa, and our market’s activity is constrained by a lack of affordable and suitable supply. That’s why we’re currently advocating for impactful measures such as allowing four residential units on property lots and getting rid of exclusionary zoning. There’s a missing middle that we need to build up.

By the Numbers – Prices:

The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures.

  • The overall MLS® HPI composite benchmark price was $628,500 in February 2024, a gain of 2.8% from February 2023.
    • The benchmark price for single-family homes was $708,500, up 3.1% on a year-over-year basis in February.
    • By comparison, the benchmark price for a townhouse/row unit was $495,000, up slightly at 0.6% compared to a year earlier.
    • The benchmark apartment price was $417,000, up 2.7% from year-ago levels.
  • The average price of homes sold in February 2024 was $651,340, increasing 2% from February 2023.
  • The dollar volume of all home sales in February 2024 was $577 million, up 17.5% from the same month in 2023.

OREB 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. Prices will vary from neighbourhood to neighbourhood.

By the Numbers – Inventory and New Listings:

  • The number of new listings saw an increase of 29.5% from February 2023. There were 1,539 new residential listings in February 2024. New listings were 10.3% above the five-year average and 3.3% below the 10-year average for the month of February.
  • Active residential listings numbered 2,158 units on the market at the end of February 2024, a gain of 16.3% from February 2023. Active listings were 59.6% above the five-year average and 17.7% below the 10-year average for the month of February.
  • Months of inventory numbered 2.4 at the end of February 2024, unchanged from February 2023. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

In conjunction with the Ottawa Real Estate Board (OREB), historical data may be subject to revision moving forward. This could temporarily impact per cent change comparisons to data from previous years.

Distinctive Real Estate Advisors Inc., Brokerage is pleased to present a recap of the latest market forecast release and February highlights from the Ottawa Real Estate Board (OREB).

We’d welcome an opportunity to discuss the Ottawa’s MLS® Market Activity Shows Strong Start to the Year. If you have any questions about our services, please contact our team.

Buyers Re-Enter the Greater Toronto Housing Market in February

As we navigate through the dynamic landscape of the Toronto real estate market, it is essential to stay informed about the latest trends and developments.

The Greater Toronto Area (GTA) has demonstrated resilience and growth, showcasing a notable increase in both home sales and new listings as of February 2024.

This positive momentum is supported by the region’s population growth and a robust economy, continually fueling the demand for housing despite higher borrowing costs.

RESIDENTIAL STATS

Total Residential Transactions Feb 2024

TRREB President Jennifer Pearce highlights the market’s adaptation to the current financial environment, with consumers optimistically anticipating future rate cuts. The adjustment in buyer strategies to mitigate the impact of elevated mortgage rates is evident, with an emphasis on saving for larger down payments and exploring less expensive housing options within the GTA.

The February statistics from TRREB’s MLS® System reveal a 17.9% increase in GTA home sales compared to the previous year, with new listings rising at an even greater rate. This provides buyers with increased options, signaling a market approaching balance. Despite the seasonal adjustments, the steady growth in selling prices and the MLS® Home Price Index Composite benchmark further affirm the market’s stability.

TRREB Table Feb 2024

Looking ahead, TRREB Chief Market Analyst Jason Mercer anticipates a resurgence in buyer activity, driven by adjusted housing preferences and the potential for lower interest rates. The emphasis on homeownership as a long-term investment over renting underscores the significance of the market’s evolution in 2024.

Average Selling Price Feb 2024 Total New Listings Feb 2024 Property Days on Market Feb 2024 Seasonally Adjusted Figures Feb 2024

What is seasonal adjustment? Seasonality refers to a monthly (or quarterly) pattern that occurs in roughly the same manner from one year to the next, e.g., sales are highest in the spring and lowest in the winter each year.

Home Price Index Feb 2024

HPI provides a price growth measure for a benchmark home with the same characteristics over time, allowing for an apples-to-apples comparison from one year to the next.

Moreover, TRREB’s efforts to address housing affordability and its social implications are commendable. The ongoing initiatives to streamline the construction of new homes and support municipalities in their quest to meet homeownership needs are pivotal in fostering a healthy and accessible housing market.

RESIDENTIAL CONDOMINIUM SALES STATS

COMMERCIAL STATS

In conjunction with the Toronto Regional Real Estate Board (TRREB) redistricting project, historical data may be subject to revision moving forward. This could temporarily impact per cent change comparisons to data from previous years.

 

Distinctive Real Estate Advisors Inc., Brokerage is pleased to present a recap of the latest market forecast release and February highlights from the Toronto Regional Real Estate Board (TRREB).

We’d welcome an opportunity to discuss the GTA Realtors Release February 2024 Stats. If you have any questions about our services, please contact our team.

Ottawa’s MLS® Market Thawed in January but Sales Still Slow

The number of homes sold through the MLS® System of the Ottawa Real Estate Board totaled 629 units in January 2024. This was an increase of 16.5% from January 2023.

Home sales were 10.7% below the five-year average and 3.9% below the 10-year average for the month of January.

Ottawa’s market activity is seeing positive gains over last year but it’s still a relatively quiet market even by pre-pandemic standards. While REALTORS® are telling us there’s lots of showing activity — probably thanks in part to the forgiving winter thus far — it’s not all translating to sales. This tells us that buyers are back out there looking, but still approaching cautiously. During the pandemic market, buyers had to move quickly and sometimes settle for a property that didn’t check all their boxes. Today, buyers are using the slower market to take the time needed to find their perfect place. Sellers would be well-advised to adjust their expectations and thoughtfully consider their pricing and timing strategy using the negotiating expertise and hyper-local data their REALTOR® can provide.

Ottawa’s market conditions can fluctuate quickly, though, because our supply is chronically low. Ottawa needs more suitable and affordable homes to address the housing crisis, and we need to increase density to meet population demands. We can’t restore and grow upon the market activity Ottawa saw five and ten years ago without more houses for people to buy. OREB recommends direct solutions for meaningful policy change, including streamlining the process at the Ontario Land Tribunal, eliminating exclusionary zoning, and permitting four units on residential lots. To meet the aggressive housing targets, we need to close the labour gap with investments in colleges and trade schools. We don’t need any more reactionary and distracting policy, like the federal government’s extension of the foreign buyers ban.

By the Numbers – Prices:

The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures.

  • The overall MLS® HPI composite benchmark price was $621,600 in January 2024, a gain of 3.2% from January 2023.
    • The benchmark price for single-family homes was $703,500, up 3.7% on a year-over-year basis in January.
    • By comparison, the benchmark price for a townhouse/row unit was $462,200, down 2.1% compared to a year earlier.
    • The benchmark apartment price was $418,500, up 3.7% from year-ago levels.
  • The average price of homes sold in January 2024 was $631,722, increasing 1.8% from January 2023.
  • The dollar volume of all home sales in January 2024 was $397.3 million, up 18.6% from the same month in 2023.

OREB 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 will vary from neighbourhood to neighbourhood.

 

 

By the Numbers – Inventory & New Listings

  • The number of new listings saw an increase of 7.3% from January 2023. There were 1,271 new residential listings in January 2024. New listings were 17.5% above the five-year average and 0.8% above the 10-year average for the month of January.
  • Active residential listings numbered 1,961 units on the market at the end of January 2024, a gain of 4.5% from the end of January 2023.
  • Active listings were 57.4% above the five-year average and 16.6% below the 10-year average for the month of January. Months of inventory numbered 3.1 at the end of January 2024, down from the 3.5 months recorded at the end of January 2023. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

In conjunction with the Ottawa Real Estate Board (OREB), historical data may be subject to revision moving forward. This could temporarily impact per cent change comparisons to data from previous years.

Distinctive Real Estate Advisors Inc., Brokerage is pleased to present a recap of the latest market forecast release and January highlights from the Ottawa Real Estate Board (OREB).

We’d welcome an opportunity to discuss the Ottawa MLS® Market Thawed in January but Sales Still Slow. If you have any questions about our services, please contact our team.

Cooling inflation reinforces a Bank of Canada Rate Pause

Highlights:

  • Inflation slows: October inflation slowed more than expected to 3.1%, contributing to a pause in Bank of Canada rate hikes
  • Mortgage rates remain high: Despite lower bond yields, fixed mortgage rates are high, but expect rates to come down another 10 – 20 basis points (“bps”) over the next couple weeks if bond yields hold
  • Home sales slide across the country: Home sales were down across the country in October, led by Alberta (-8.3%)

Canada’s headline inflation rate slowed more than expected in October, coming in at 3.1% annually compared to expectations of 3.2%. The slowdown was due primarily to a 6% monthly decline in gasoline prices.

Slowing inflation—together with weakening GDP growth (Q3 is shaping up to be flat or slightly down) and a rising unemployment rate (up 0.7% in the past 6 months) —paints a compelling picture of an economy shifting into a lower gear.

It certainly looks at this point like the Bank of Canada is done hiking for the foreseeable future. Markets are now pricing in a Bank of Canada pause until April 2024, followed by 75 bps of rate cuts by the end of next year.

Mortgage Market Update

Government bond yields are a major determinant of fixed mortgage pricing. The bellwether 5-year Government of Canada bond yield is reflecting the likelihood of rate cuts in 2024 and has fallen by roughly 50 bps, or 0.5%, over the past six weeks.

Meanwhile, fixed mortgage rates—which are heavily influenced by bond yields —have remained stubbornly high, with average deep-discounted rates down by just 10 bps from the recent peak.

Lenders have a long history of quickly raising mortgage rates to match bond yields on the way up, but being slow to pass on cost savings when bond yields fall. We should expect rates to come down another 10 – 20 bps over the next couple weeks if bond yields hold here.

Household loan growth falls below 3%

With rates still elevated, household borrowing remains tepid. Loan growth fell to just 2.9% year-over-year in September…the first sub-3% “print” since 1983. Mortgage growth slowed to just 3.2% year-over-year and 0.2% on a monthly basis. It would be even lower were it not for the impact of negatively amortizing static-payment variable rate mortgages at several big banks.

Mortgage originations remain roughly 40% below peak and will likely remain below normal levels for the next year before the wave of mortgages originated in the 2020-to-early 2022 boom era begin to renew in 2025.

New originations continue to be heavily skewed to shorter-term fixed rate loans, but we are seeing some signs that that popularity of variable rate loans is beginning to rise again, having grown from 5% of originations to closer to 10% in the past two months.

Affordability eases slightly

Any improvement in affordability, however modest, is welcome news these days. The monthly mortgage payment required to purchase a typical home in Canada fell by $59 in October as a function of a slight decline in both interest rates and house prices.

With affordability still deeply strained, demand remained under considerable pressure in October. Seasonally adjusted home sales nationally posted the largest monthly decline since June of last year, falling 5.6% month-over-month. All big provinces posted substantial declines led by Alberta (-8.3%) and British Columbia (-6.9%). Ontario saw a 5.5% decline while Quebec saw a sales drop of 5.1%.

The market balance continues to tilt towards buyers with the sales-to-new listings ratio falling below 50% nationally for the first time since 2012.

Consequently, house prices have come under renewed pressure with the MLS House Price Index posting a 0.8% monthly decline in October.

It’s important to remember that there is no single “Canadian” real estate market. Regional dynamics vary widely, and this becomes abundantly clear when we look at the change in house prices over the past three months in major Canadian cities. It’s clear that major metros in southern Ontario are driving the national weakness, while Alberta and eastern Canada continue to perform well for now.

*Any forecasts contained in this report are accurate as of the date indicated

We’d welcome an opportunity to discuss the perspectives presented in this Q3-2023 Housing and Mortgage Market Review. Please contact our team today at (416)925-3140 or (613)366-8525 or by e-mail.

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