Here are a few thoughts on some trends or factors that will shape our market in the coming year:
New mortgage “stress test”:
Much has been written about how this additional 2% will impact buyers and approval levels and it will have some impact on the upper end of the market and perhaps for some investors. Biggest worriers on this have been the mortgage broker community and they are closer to the approval lines than we, so if they are concerned then there is probably something to it. With mortgage rates continuing to move slightly higher, this may also have an impact on the market.
Re-sale listing inventory levels:
Resale listing levels have been very low for most of the past year and this has caused challenges for buyers and has helped push prices up on residential properties, as demand exceeds supply in most cases.
Listing scarcity has also spawned a number of Realtor activities including more widespread use of exclusive listings or pocket listings, as well as future sales or purchases. Ie sell now buy later or buy now-sell later. These creative marketing programs are mostly for the individual Realtor benefit but also have the effect of keeping listings off the MLS® system and further tightening supply. Unless a property is exposed to the full MLS® market and buying public, one cannot guarantee they are getting their best market value and we think all properties are best listed on full MLS® market.
Builders had a big year in 2017 and prices have been catching up after several slower years. Builder delivery schedules may be tightened ie lengthened if the strong sales performance continues. We can also expect to see further price increases, if scarcity and labour constraints are present. Builder inventory or quick occupancy homes remain a good option for buyers and Realtors can help their clients’ research new construction options.
Local ownership diminishing in real estate brokerages:
A clear trend has been taking place over the last couple of years and this has resulted in a lot of Ottawa real estate brokerages ending up in the hands of out of town owners, primarily Toronto based large firms. All quality organisations but if you prefer to deal with a local broker and owner then there are many small, independent brokers that offer excellent service and more often than not, at lower prices than the mega brokerage.
Competition Bureau vs TREB:
Will this be the year that the final story is written on availability of MLS® data via 3rd parties, so consumers can do their own research on line? This legal trail is a long and winding one but if an when it is completed, we can expect to see a bit of disruption in the market. Update Feb 6th: apparently TREB is now appealing to the Supreme Court of Canada, so the saga continues....
There is always the potential for government or other regulatory activity that can impact the market but we can’t see anything in the short term that should have a major impact on our market. The marijuana legalization and some of the provincial moves on tenancies may cause a few wrinkles and deter investor buyers but this remains to be seen.
All in all, it looks like is should be another solid year in Ottawa real estate….stay tuned!, we look forward to working with you this year!
Gord McCormick, Broker of Record
Dawn Davey, Broker
A lower commission brokerage...12th year in business!