How will Federal election results impact Ottawa real estate?

Published 06 September 15 08:55 AM | Gord McCormick 

As we reach the halfway mark in a hotly contested (and for us, lengthy) campaign, we were wondering what the election outcome might mean for our local real estate market.  Though few can have an accurate crystal ball on this issue, we did a little history checking and offer some thoughts on the matter:

 

Price growth history:

  The good….

2004-2011 was a period where we had minority Federal governments in power and this was a pretty good time for Ottawa real estate.  Average prices during this period rose some 45.8% to $343,701.

Ottawa also fared pretty well under a Liberal majority government between 1999 and 2004 where average prices rose from $149,650 to $235,678 a whopping 57.5% increase.

….and not so good:

Ottawa had not fared so well under Liberal majority governments from 1993-1999 when the Chretien Liberals decimated spending and public service headcount to balance the Federal budget.  Average prices in this 6 year period rose a total of just 1% from $148,129 to $149,650.

In the first years of the Chretien majority government housing transactions in Ottawa dropped by almost 30%, reflecting the drastic change in the local economy when the government was slashing budgets and personnel to react to a large deficit and a recession.

 

Current Market:

The current Conservative government elected with a majority in 2011 have curtailed government spending and headcount growth here in Ottawa to balance the budget and as a result our market has slumped somewhat during this time.  In fact, 2011 was our last solid year of average selling price growth which saw prices increase by 5.2%.  From 2011 to present, we have seen average price growth of only 8.6% total over the 3 and a half year period.

 

Bottom line:

A government that is not focused on balancing the budget or believes in “tax and spend” for new programs, is best for our local real estate market, as bigger government and more spending is generally good news for the Ottawa area economy.

Though we have fared well under both majority and minority governments, it is our view that a minority government is probably the safest, as there is less chance for drastic change in government management that could be made by a majority government and spending and head count are unlikely to be severely threatened.

You guess is as good as ours about what it going to happen in mid-October but at this stage it appears the many possible outcomes are unlikely to hurt our local real estate market and in fact, it is most likely we will see more spending rather than less.

 

Gord McCormick, Broker of Record

Oasis Realty Brokerage

613-435-4692  oasisrealty@rogers.com

www.oasisrealtyottawa.com

 

 

 

 

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