July brings Ottawa's real estate market to new all time highs, continuing months of near-constant growth despite the impact of COVID-19. Home sales in July were 2,189, a 19% increase compared to July 2019. Prices have risen as well with more than 19% increases year over year for all property types. Price levels have been driven by unprecedented demand with over 57% of properties selling over their listing price.
The growth in Ottawa real estate leads real estate growth in other markets throughout Canada. Backed by record household savings rates and government programs including the CMHC First-Time Home Buyer Incentive, many Canadian housing markets have risen past their previous highs despite COVID-19. Ottawa also has the advantage of being a center for government jobs, which are usually stable and highly-valued in times of financial uncertainty.
The optimism in real estate markets may have been further boosted by recent announcements by the Bank of Canada promising continued Quantitative Easing and low interest rates into 2021. In addition, Prime Minister Justin Trudeau and the Federal Government have announced the extension of the Canadian Emergency Wage Subsidy until the end of 2020. This may protect Canadians from further unemployment shocks and support Canada's economic recovery.
Due in part to the continued growth in real estate as well as loose monetary policy, mortgage lenders, including members of the Big Five (RBC, TD, CIBC, Scotiabank, and BMO), are increasingly willing to discount risk in the housing market and are offering record-low mortgage rates. Although this highly-competitive market may not last past the end of 2020, mortgage rates are not expected to rise significantly by 2022.
MLS® HPI: The MLS® Home Price Index (HPI) is an index by the Canadian Real Estate Association (CREA) that tracks the prices of homes in a neighborhood. It allows Canadians to quickly compare home prices across Canada and between periods of time without having to account for specific features of a property. Unlike market prices, which can fluctuate from month to month based on seasonal dynamics, the HPI provides a stable view tracks trends across a longer period of time. The HPI is reviewed every year in May to adjust for changes in the real estate marketplace.
MLS® HPI Benchmark Price: The MLS® Home Price Index (HPI) Benchmark Price is the HPI translated into a real-world price number.
Strata Insurance: Strata insurance is insurance used by a strata like a condominium to covers damages to common areas and assets and liability to the strata. It can also include fixtures built or installed as part of the original construction of each unit, even though these may not be common structures. The insurance can cover:
Strata insurance does not usually include personal items and appliances that are part of a condo unit. It also does not cover the damages made by individual unit owners, such as in the case of water damage caused by a unit owner. These are usually covered by personal condo insurance.
Detached home: A detached home is your standard single-family home. It is a residential building that stands alone and is separately titled or legally a single unit.
Semi-detached home: A semi-detached home is similar to a detached home, except it shares a wall with another home. This pair of homes must make up an independent building and each should be separately titled or legally two separate units. There can only be two homes in a semi-detached building.
Townhouses: A townhouse is the middle between a detached/semi-detached home and a condo apartment. Like detached and semi-detached homes, they are often single-family units that have their own land and may be attached to other units. However, like condo apartments, they typically have to pay co-ownership fees for maintenance and may share some common features with their neighbors.
Condo apartment: This category includes all apartments and condominiums. These are complexes of residential units with common areas such as hallways, parking lots, stairwells, etc. They can be low-rise, mid-rise, or high-rise buildings. Unlike townhouses, there are no parts of the lot (the land of the building) where access is reserved for only one owner or occupant. There can be privately owned units and spaces inside the building.
Freeholds: A freehold is any property where the owner owns both the house and the land it is built on. Common freehold property types include: detached, semi-detached, some townhouses, and farmland.
Condominiums: A condominium or condo is any property where the owner owns the home (or unit) but shares ownership of the land and other improvements with a condominium corporation. Common condominium property types include condo apartments and some townhouses.
Data sourced from the Real Estate Board of Greater Calgary (REBGV) and the Canadian Real Estate Association (CREA). Any analysis or commentary is the opinion of the analysts at WOWA.ca and should not be construed as investment advice. Please consult a licensed real estate professional before making a real estate investment decision. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.