New Mortgage Rules

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 to 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 recent pattern that has favoured sellers of homes in the west end of Ottawa.

Ottawa's housing market

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 Carlingwood-Westboro is now solidly 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, number of bathrooms and age of the property, 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, recognized as a bedroom community for DND employees, the benchmark price for single-family homes edged up just 2.3 per cent to $389,000 in November compared to a year earlier.

This made it one of 12 districts in which benchmark prices were below $400,000. The least expensive: Carlsbad Springs, where single-family 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 single-family homes. According to board data, which tracked sales using a simple average (rather than benchmark prices), real estate agents sold nearly 300 condos in November for an average of $257,200 — down 7.6 per cent year-over-year.

(For context, average prices for residential properties sold in November across Ottawa were up 3.2 per cent to $418,350.)

There were sharp variations by region. The average price for a condo sold in the east end surged by 32 per cent year over year to $333,000 while in the west, the average price actually dropped 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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