Ottawa Real Estate Newsletter – November 2022
Ottawa Real Estate News Release (OREB)
Resale Market’s Adjustment and Correction Continues
OTTAWA, November 3, 2022 – Members of the Ottawa Real Estate Board sold 987 residential properties in October through the Board’s Multiple Listing Service® (MLS®) System, compared with 1,670 in October 2021, a decrease of 41%. October’s sales included 758 in the residential-property class, down 40% from a year ago, and 229 in the condominium-property category, a decrease of 44% from October 2021. The five-year average for total unit sales in October is 1,554.
“After the volatility of the past two pandemic years, which was unsustainable, the market is correcting and adjusting,” says Penny Torontow, Ottawa Real Estate Board President. “The slowdown is compounded by Bank of Canada interest rate increases, which further exacerbates buyer hesitancy and weakens people’s purchasing power—especially first-time homebuyers.”
“Demand is still high, and with increasing inventory available, Buyers have more choices and time to shop for their new home. However, the ongoing speculation about where prices and interest rates are headed shakes consumer confidence and has made some prospective Buyers take a wait-and-see approach.”
“Sellers may be understandably concerned about market fluctuations, which have been more drastic lately,” she adds. “As with any major investment, a longer-term perspective is important. The significant year-over-year gains of the last two years were not sustainable. If you have owned your property for any length of time, your equity has increased significantly and will buffer price corrections. If you buy and sell in the same market, it is all relative.”
By the Numbers – Inventory & New Listings:
- Months of Inventory for the residential-class properties has increased to 3.3 months from 1 month in 2021.
- Months of Inventory for condominium-class properties has increased to 3 months from 1.2 months in 2021.
- October’s new listings (2,047) were 4% higher than 2021 (1,960) and down 14% from September 2022 (2,371). The 5-year average for new listings in October is 1,971.
By the Numbers – Average Prices*:
- The average sale price for a condominium-class property in October was $445,691, an increase of 9% from 2021.
- The average sale price for a residential-class property was $677,873, decreasing 5% from a year ago.
- With year-to-date average sale prices at $780,390 for residential units and $456,470 for condominiums, these values represent an 8% increase over 2021 for residential-class properties and a 9% increase for condominium-class properties.
* OREB cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price will vary from neighbourhood to neighbourhood.
Mortgage Fraud
I’d like to share two messages with you with regards mortgage fraud. The first one is from Phil Soper President and CEO of Royal LePage, the second message is from Joseph Richer, Registrar for RECO – Real Estate Council of Ontario
Important message from Phil Soper re: mortgage fraud
To: Royal LePage Broker/Owners, Managers, Sales Representatives and Administrators
It has come to our attention that some real estate professionals in Canada are committing fraud by facilitating, for a fee, the fabrication of false employment, income and tax documents, for the purpose of obtaining mortgages for their homebuyer clients who may not otherwise meet strict borrowing qualifications.
The findings in this CBC Marketplace report are serious and disturbing. Unfortunately, the poor choices of a few can have devastating consequences for our industry’s reputation as a whole.
Royal LePage unequivocally condemns this unethical practice, and will have zero tolerance for such behaviour. Any agent or broker operating under the Royal LePage brand, or any of its affiliated brands, who engages in fraudulent activity, or is found to deliberately mislead consumers, will face disciplinary action.
Royal LePage is a company built on a strong foundation of integrity and professionalism. Our network of real estate professionals has earned Canadians’ trust by upholding these principles and acting in the best interest of our clients. Canadians know they can count on Royal LePage to act honestly and respect the highest standards of our industry.
Sincerely,
Phil Soper
President & CEO, Royal LePage
Statement from the Registrar
PROFESSIONAL RESOURCE
October 28, 2022
Mortgage fraud is illegal
We are aware of recent allegations that some real estate agents and brokerages in Ontario are facilitating mortgage fraud. To whatever extent this is happening, it must stop.
We are investigating these allegations and assessing next steps.
Be assured that RECO will prosecute any registrants who are proven to have engaged in mortgage fraud.
Such conduct is a breach of the Real Estate and Business Brokers Act, 2002 (REBBA) and also breaches other laws, including the Criminal Code of Canada.
Prosecution for falsifying information or assisting in the falsifying of information can result in fines up to $50,000, prison for up to two years, or suspension or revocation of the agent’s RECO registration. More severe penalties could be levied if individuals are convicted under the Criminal Code.
It is also illegal for a real estate agent to ask a consumer for money to get their loan approved.
RECO takes this matter seriously and encourages anyone with evidence of mortgage fraud occurring to report it to authorities, such as the Financial Services Regulatory Authority (FSRA), which regulates mortgage agents, RECO, or the local police service. You can file a complaint with RECO here.
In addition to being illegal, such activity undermines consumer protection and confidence in the real estate sector. We expect all real estate professionals to support us in driving home the message that there is zero tolerance for this behaviour in the real estate industry.
Mortgage fraud is illegal and we must all work together to prevent it.
Joseph Richer Registrar, RECO
Ottawa’s Downtown Commercial Vacancy Rate Remains High
Return to the office is sluggish: real estate experts say Ottawa’s vacancy rate could remain flat for years
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“We haven’t seen a significant return to the office in any meaningful way,”
Hugh Gorman, the CEO at commercial property manager Colonnade BridgePort
“I don’t think there’s anything to suggest that we’re going to see growth in office space demand in the near term.”
Canada Mortgage and Housing Corporation (CMHC) – Housing Starts / September 2022
The Canadan Mortgage and Housing Corporation state that at first glance the September 2022 housing starts may look promising, but there’s much more to be done, experts say. The housing starts number rose slightly in September the CMHC reports that the situation is multi faceted and cannot easily be summarized in one number.
CREA The Canadian Real Estate Association – National Statistics
On October 14 CREA released statistics for national home sales for September.
Highlights:
- National home sales were down 3.9% on a month-over-month basis in September.
- Actual (not seasonally adjusted) monthly activity came in 32.2% below September 2021.
- The number of newly listed properties edged down 0.8% month-over-month.
- The MLS® Home Price Index (HPI) declined by 1.4% month-over-month but was still up 3.3% year-over-year.
- The actual (not seasonally adjusted) national average sale price posted a 6.6% year-over-year decline in September.
Royal LePage forecast adjusted downward
According to the Royal LePage House Price Survey the national aggregate home price set to end year modestly below 2021 following third-quarter price declines in the majority of Canadian markets.
Key highlights from the release include:
- National aggregate home price for the final quarter of the year forecast at -0.5% compared to Q4 of 2021, giving up gains made early in 2022
- National aggregate home price increased 3.3% year-over-year in third quarter of 2022; decreased 4.9% quarter-over-quarter
- Prices remain well above pre-pandemic levels; Canada’s national aggregate home price increased 25.4% in Q3 over the same quarter in 2020, and 21.5% over the same quarter in 2019
- 58 of the report’s 62 regional markets posted quarterly aggregate home price declines in Q3
- Prices decline on a quarterly basis in Greater Montreal Area for the first time in more than five years as market activity drops, following trend set in greater regions of Toronto and Vancouver in Q2
- Major markets in Atlantic Canada and the Prairies show modest quarterly price declines in Q3; Calgary and Edmonton markets faring better than other major cities
Ottawa Real Estate Statistics – September 2022 – Community Stats
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