JAMES BAGNALL, OTTAWA CITIZEN

Published on: June 2, 2017 | Last Updated: June 2, 2017 7:26 PM EDT

 

Real estate agents are finally getting a taste of spring — at least in some parts of the city.

The average price for residential properties in Ottawa sold in May jumped 7.4 year over year to $436,600, the Ottawa Real Estate Board reported Friday. It’s the second month in a row that has seen prices increase in excess of seven per cent, suggesting Ottawa’s real estate market is strengthening in favour of sellers.

Certainly agents are seeing multiple offers for new listings, particularly for single family homes in popular districts to the west and south of the downtown core. Toronto investors are now on the scene, hunting for real estate investments that don’t cost the moon. “I’ve had six clients from Toronto looking for properties,” said one agent who did not want to be named.

Certainly the number of transactions in Ottawa picked up in May.

May Market Changes

“It was a rainy month,” said board president Rick Eisert. “It’s possible a lot of people couldn’t do outdoor things so they went shopping for houses.”

The board reported that its members sold nearly 1,900 residential units in May, up sharply from 1,600 a year earlier.  The market for condominiums was even more active as real estate agents sold a record 444 units in May, compared to just 307 in May 2016, representing a surge of nearly 45 per cent.

“The condo market has really helped strengthen the whole market over the past few months,” said Eisert. “There were a lot of condos in inventory and people were happy to be selling them off.”

Even so, the prices fetched for condo sales were modest. They averaged $271,000 in May, up just 2.3 per cent year over year.

A look at 46 districts tracked by the Ottawa Real Estate Board reveals some remarkable divisions across the city. A dozen areas recorded year-over-year gains in benchmark prices of less than 3.5 per cent for single family homes — and all but two of these were in the eastern sections of the city. These include enclaves such as Blackburn Hamlet and Orléans, home for thousands of Department of National Defence employees.

(The detailed district data uses a benchmark price developed by the OREB and other regional agencies. This tracks housing characteristics such as age of property, number of bathrooms and type of roof, which permits the creation of an index on which the benchmark price is based. The OREB claims it offers a more consistent view of underlying trends in the housing market.)

Real estate agents reported a significant shift in preferences among DND employees for homes closer to the department’s new headquarters in the west end of the city, especially for those who are being transferred into the city. While the DND headquarters move is running behind schedule, more than 1,000 workers have finally moved onsite, with 7,000 more due to arrive in the next two or three years.

Of course, many DND staff members will continue to work out of downtown office buildings — about half DND’s total local workforce will eventually be based at the new headquarters. This means DND’s influence over the housing market isn’t being felt entirely in the west. Some families are opting for homes south of the downtown core, which may account for some of the popularity of districts such as Hunt Club/Windsor Park (where single family homes sold for 20 per cent more in May compared to a year earlier) and Billings Bridge/Riverside (up 15 per cent). 

A strengthening high-tech sector, much of it clustered in Kanata, is helping to drive up prices in western districts. But with online retailing specialist Shopify set to significantly expand its downtown operation, house prices in the south and perhaps even the city’s core could be set for a boost in the months to come.