Photo: Yassine Laaroussi/Flickr
After years of stagnation, Ottawa’s housing market is now poised to become one of Canada’s hot spots, suggests BMO.
“Watch Ottawa… that market is about to break out,” writes Robert Kavcic, a senior economist at BMO Economics, in a note published today titled “Ottawa Housing Train is Leaving the Station.”
The supply of condos in the nation’s capital is “ample,” but detached homes are “quite scarce,” says Kavcic. This, the economist notes, has been driving the average home price there higher recently.
For the Ottawa area, the average price of a home sold in June reached $407,214, up 8.9 per cent from one year earlier, according to the Ottawa Real Estate Board.
That’s a departure from what has been observed in the market over the past several years, Kavcic notes.
“Ottawa is unique in that, unlike its counterparts in Vancouver and Toronto, the market has been stagnating for about five years even as mortgage rates have plunged to record lows,” he continues.
“This was partly due to fiscal restraint under the prior government,” Kavcic explains.
Even with recent price appreciation, the Ottawa market remains considerably cheaper than both Toronto and Vancouver.
The average selling price of a home in the Greater Toronto Area last month was $793,915, while the benchmark was $896,000 in Greater Vancouver.
Relative affordability is part of the Ottawa market’s appeal, suggests the Ottawa Real Estate Board.
And policy aimed at cooling local markets in Ontario’s Greater Golden Horseshoe, which includes the GTA but not Ottawa, have made the nation’s capital even more attractive.
“Since the announcement in April by the Liberal government of cooling measures in Toronto, it’s no surprise that the Ottawa market has been thriving,” writes Ralph Shaw, the Ottawa board’s president-elect, in a recent report.
“We have a great mix of city life and rural expanses. It’s no wonder MoneySense just named Ottawa as Canada’s best place to live in 2017,” he adds, a point Kavcic addresses.
Kavcic says that publicity is unfortunate “for contrarian investors.”
It appears the secret is out.