Oasis Realty Brokerage, Ottawa Real Estate
Gord McCormick Ottawa, ON K2S0H6
Phone: 613-435-4692 Mobile: 613-371-9691 Fax: 613-435-4698

Ottawa listing inventory highest in 12 years!

Many sellers face stressful summer in Ottawa real estate
June sales results were generally positive with increases in residential unit sales and average prices but listing inventory continues to grow and make life miserable for many sellers (especially condo sellers).  Unit sales and prices for residential properties are up slightly but condo unit sales are down 21% compared to last June and down 15.8% based on a 5 year average for year-to-date sales.

Residential sales are up about 4% year-to-date compared to both the 5 year and 10 year averages at the end of June.

Prices in both property categories are very modest on a year-to-date basis with the average residential property posting a 1.7% increase to $398,051 and the average condo price sold this year is $263,843 for an increase of .5%. 

Listing inventory may be the highest ever! Condos double 10 year average, residential +39.2%
We checked back as far as our available stats permit and our current inventory levels are the most for any month during the last 12 years.   Though our demand level is reasonable overall, there are just too many sellers in the marketplace.  Residential listings continue to increase and are 34.8% higher than the 5 year average and 39.2% higher than the 10 year average.  Condo listing inventory is 57.4% higher than the 5 year average and 100% higher than the 10 year average.

On the good news side, many of these sellers will also become buyers if their existing properties sell.

Who is having the most trouble selling?
There are a number of categories that suffer more than others in this type of buyer’s market, best to check with a Realtor to see how these circumstances might affect a particular property.  We’ll have a post on this later this week.  Condos, unique properties, non “move-in-ready” properties, higher priced listings, FSBO’s and those with excess improvements head the list of “toughest to sell” listings right now.

New home sales off about 20%:
New construction sales and starts are down about 20% this year, so builders are offering significant incentives for buyers to consider new construction.  This adds to the competitive choice for buyers but also makes even more competition for the resale listing, particularly for newer homes in areas where the builder is still building the same or similar models.

What to expect this summer/fall:
We expect to see continuing price adjustments by sellers who have now missed the peak spring market which should help keep residential unit sales in positive territory during the summer. Condos may be another matter altogether.

Get it sold by September!
Sellers with committed buying plans or other financial plans who have not had success in marketing their properties will certainly want to be aggressive in getting a deal done before the end of September when sales levels start the fall seasonal decline. (Summer sales levels are about 20-25% lower than spring and fall levels are 40-50% lower than spring)

Save $1,000’s on commissions and get it sold now!
We have some amazing commission saving programs and marketing plans to help ensure sellers get deals done this summer! If you are not already working with another Realtor and would like to discuss selling and/or buying options please give us a call 613-435-4692

* not intended to solicit those with existing representation agreements

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage

Summer is the best time to sell until next spring!

DON’T: “...wait until things pick up after Labour Day”:
One of the myths of Ottawa real estate is that summer is not a busy time for business.  “…school’s out…everyone goes on vacation or goes to the cottage” are familiar comments to explain the perceived summer business doldrums.  Nothing could be further from the truth!  Real buyers and sellers are still focused on real estate as a top priority.  For sellers summer represents the best chance to get their property sold and for buyers, they will have the best choice of listings until next spring.

Summer is the “Second Season”
Take a look at the table below which shows how important the summer season is to overall annual sales:










































































80% of year’s sales done by end of September:
July sales levels are not typically achieved again until April and August sales are not superseded until next March, so now is the best time to get deals done.  We have a lot of listing inventory available for buyer choice and some motivated sellers.  Those selling, having missed the peak spring market are well advised to review their marketing and selling plans, particularly as regards pricing and presentation. 

Could mandatory home energy audits and a double land transfer tax be here for 2016?
See post below on the potential for two potential provincial government programs that could really dampen our real estate market.  Our market is steady but certainly not strong and we have far too much listing inventory.  Either of these two programs will make selling (and buying!) more costly and if both were to be implemented, we would see a few months of high demand while buyers and sellers tried to beat program implementation, followed by an extended period of slackened demand which could dramatically hurt an already fragile and price sensitive market.

Coming soon... mandatory energy audits and the MLTT?

Mandatory Energy audits and the MLTT: two good reasons to buy or sell now!
Buyers and sellers should be concerned with two pending agenda items on the Provincial Government review list:  the potential implementation of mandatory green energy audits and a Municipal Land Transfer Tax (MLTT).  If implemented, both of these items will add significant cost and complexity for buyers and sellers, possibly even prior to spring 2016.

Ten's of thousands of lost market value or green energy upgrade costs:
One portion of the disastrous Liberal Green Energy Act 2009 was shelved but is being revisited and would call for mandatory home energy audits prior to listing a property for sale.  While it is hard to disagree with the intent of the program, we feel that making the program mandatory is overkill and will cost Ontarians thousands and thousands of $$.

The cost of the audit itself would probably be fairly reasonable, between $350 and $500.  The real cost is in the updates necessary to score a better energy rating and the lost market value for homes with low energy scores.  Many seniors who have been in their homes for a long time could well be hit with big energy upgrade costs or a loss of their capital nest egg.

Upgrade costs would include costly windows, doors, electrical, lighting, heating/cooling systems, insulation and appliances and would run in to some major money. 

Sellers would have to get all this done prior to selling and would have no choice but to pass along the costs to buyers.   

Do you want to pay $5,700-$12,200-$20,200 in land transfer tax?
The MLTT has been in existence in Toronto for 7 or 8 years now and generates some $350-$400M annually in tax revenue.  While city officials in Ottawa have indicated they have no interest in implementing the MLTT here, it is clear that the Provincial Government is all about finding new “revenue tools” and Ottawa has some huge projects to finance (LRT and Ottawa River clean-up to name but two).  A large part of the funding for these projects is expected to come from the debt ridden treasury of the province.  So the money has to come from somewhere, either higher provincial income taxes, property taxes, special taxes like the MLTT or some combination thereof.

The city could be forced in to implementing a Toronto like MLTT in order to fund committed projects without drastically raising property taxes.

The MLTT would add the equivalent of the provincial land transfer tax to every purchase and increase the cost of buying a new home significantly.  The total land transfer tax burden on a future purchase would be as follows:
$300,000 purchase: $5,700 in provincial and municipal land transfer tax
$500,000 purchase: $10,475
$700,000 purchase: $20,200

So while nothing is for sure, never trust the shifting winds of politics and politically feasible methods of taxation. (especially with a debt ridden majority government!) Both of these measures could be in place by this time next year, so if you need another reason to be buying or selling this year…this might be it!

positive finish to peak season but inventory looms large in Ottawa

May results were pretty positive for unit sales with an overall increase of 7.7% compared to May 2014.  June looks to be another fairly strong month also, before we head in to the summer and fall seasons where unit sales typically drop 20-25% in the summer months and 40-50% in the fall.  One month of reasonable growth in unit sales does not do much to decrease an inventory level that remains a challenge for many sellers.

Year-to-date results steady but mixed:
Overall unit sales and demand has been steady but a price sensitive market with lots of competition has kept average prices in check. Through May, residential sales prices average only 1.1% more than last year and the average condo unit selling price is down 0.7%.

On a unit sales basis, the number of residential sales is up 7.3% and the unit sales for condos is actually 1.3% less than last year.(although condo unit sales did show an increase in the month of May)

Excess listing inventory prevails:
We still have an excess of listing inventory and listing flow has continued strong this month also. Overall, we see a total of approx. 10,500 residential and condo listings at time of writing (June 17th) which is enough for the next 10 months anticipated sales. Or put another way: if we did not have another new listing, we have enough listing inventory for expected sales until the middle or end of April next year!

Good buyer choice overall suggested by total inventory #'s:
The number of residential listings at the end of May was 34.3% higher than the 5 year average between 2010-2014 and condo listings 57% higher.   This inventory is weighted heavier in the higher priced listings ( residential $500K+ and condos $300K+) so while there is an overall excess inventory this may not be true for all areas and price points.  Speak with your Realtor about the market dynamics in your area of interest.

"Second" season slows but still the best time to sell before next spring!
As one can see from the table below (When is the best time to sell?), monthly unit sales start to decline from the end of June and continue to do so until things start to ramp up for next spring.  So summer is far from a "dead" time in Ottawa real estate and is the 2nd best time of the year to get a sale done.

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