Real Estate News – December

Here it is, Ottawa!   As you probably know, we’re now in the slow period for real estate sales.   Typically, the market will pick back up around early to mid February.   So, what can we expect for 2025?   Here are a few of my thoughts and concerns for the next year:

– the unemployment rate has risen to 6.8%   (and I don’t see this improving)
– household debt is at all-time highs  (again, not sure how this is going to improve any time soon)
– housing construction starts have slowed dramatically, leading towards further inventory shortages
– inflation will most likely continue (it appears to be slowing, but not stopping)
– interest rates may come down again slightly (I’m hearing forecasts of 0.25% on Wednesday)
– many buyers are migrating to smaller, more affordable communities (ie. east coast, Newfoundland, Quebec, Thunder Bay, Sudbury, etc)

I realize that this does look quite doom and gloom, however there are some positives to our current situation.  First off, Ottawa’s real estate market continues to be fairly balanced (same with Gatineau).  What this means: Ottawa looks good for home price stability and  for a balanced supply of inventory.   The chart below shows how Ottawa stacks up against other Canadian cities.

This leads me to my next point; inventory levels.   With the ongoing slowdown of new home starts, I expect inventory of available homes will decrease over time.    Our population is growing, and to say we’re not building enough new homes would be an understatement.    I feel like a broken record here but I’ll say it again; builders are almost exclusively focused on building rentals nowadays, which is shifting many Canadians into a permanent tenancy status.   The decreasing interest rates do help, but….

Over the next year(s), I expect we’ll see average home prices gradually increasing and making their way back to up to 2020 and 2021 levels.  All of this adds up to increased consumer confidence (finally :))   

 NOVEMBER MARKET STATS:

Home sales volume is down compared to November of 2023, and we’re also down 3.1% below the 5 year average, and down 0.5% below the 10 year average (for November).   A fairly stable but slow market at the moment.

As we can see, the number of new listings keeps climbing, and the ‘months of inventory’ is also growing.   These are the signs of an overall slower market, but from a broad perspective, we still have lower inventory and homes are still selling in a reasonable time frame.   

AVERAGE SALE PRICES:
The average price of detached homes sold in November was $722,400.   This is an increase of 2.1% from 2023.
The average price of townhomes (condo & freehold) sold in November was $491,500.   This is an increase of 0.3% from 2023.
       

BIG PICTURE :  WHAT’S NEXT?   

Let’s look at household debt.   For many Canadians, this  is a high-risk position, with very little margin for error.    If I have to guess at the overall picture in this country, I expect things will become even more challenging economically (for most households).

OTTAWA NEWS:

Since hockey season is in full force, let’s take a look at one of the recent updates on the Ottawa Senators proposed Lebreton Flats stadium.   As you can guess, we’re still quite a ways away from this being finalized.   At least it sounds like all parties are interested in making this happen.   There’s hope, Ottawa  🙂
More info here.

That’s it for this month.   As always, if you or anyone you know is thinking of making a move, I would love to help  🙂

CHRIS STEEVES

www.exprealty.com

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