Ottawa’s aggregate home price surpassed Calgary’s for the first time ever in the first quarter of 2019 – making the capital the fourth-most-expensive housing market in the country, Royal LePage said on Thursday.
The aggregate price of a home in Ottawa rose 7.7 per cent year-over-year to $469,407 in the first three months of the year, the real estate firm reported. Calgary, meanwhile, had an aggregate price of $468,974.
Royal LePage said the median price of a two-storey home in Ottawa increased 9.6 per cent year-over-year to $503,761, while bungalow prices rose four per cent to $450,016. In the same quarter, the median price of a condominium edged up 1.7 per cent year-over-year to $321,017.
The company said the capital’s robust tech- and government-driven economy and dwindling supply of rental housing helped it buck a national trend that saw home prices across Canada increase less than three per cent in the first quarter.
“Nationally, sales were soft in the first quarter, but Ottawa's market activity is up,” John Rogan, broker of record and branch manager at Royal LePage Performance Realty, said in a statement. “With (rental) vacancy rates at one per cent, a healthy economy and relatively affordable real estate compared to other major urban centres, buyers are very motivated to get in the market.”
The firm also expects Ottawa to have the biggest gains in the second quarter, forecasting aggregate price growth of 2.8 per cent – well ahead of the projected national increase of one per cent.
The housing picture is much different in other parts of Canada, according to Royal LePage.
Data from 63 of the nation’s largest real estate markets showed that the price of a home in Canada increased just 2.7 per cent year-over-year to $621,575 in the first quarter of 2019, well below the long-term norm of about five per cent.
The median price of a two-storey home rose 2.6 per cent year-over-year to $729,553, while the median price of a bungalow increased 1.1 per cent to $513,497. Condo prices remained the fastest-growing nationally, rising 5.4 per cent to $447,260.
While house prices in Ottawa are expected to keep rising over the next three months, Royal LePage is predicting prices to fall in much of the rest of the country – including Vancouver, where prices in what was once Canada’s hottest housing market are expected to drop 1.4 per cent.
“We are expecting this to be a sluggish year overall in Canada’s residential real estate market, with the hangover from the 2018 market correction and weaker economic growth acting as a drag on home price appreciation, balanced by lower for longer interest rates,” Royal LePage CEO Phil Soper said in a statement.
Soper said that could be good news for house-hunters looking to jump into the market in the near future.
“There is a silver lining here,” he said. “This slowdown gives buyers, and first-time buyers in particular, an opportunity to buy real estate in our country's largest cities.”
The organization hailed new government programs designed to make housing more accessible to first-time buyers, including a plan that would allow the Canada Mortgage and Housing Corp. to kick in up to 10 per cent of the purchase price.
“Without a healthy influx of first-time buyers, the entire cycle of real estate activity can stall,” Soper said. “There is the chance, however, that activity levels in the spring of 2019 will be reduced as some delay purchases, waiting for the (CMHC) incentive to kick in.”
The report comes one day after the Ottawa Real Estate Board said year-over-year home sales in the capital dipped slightly in March, the second straight monthly decline.
OREB president Dwight Delahunt blamed flat sales on a lack of quality housing stock in the region that is shackling would-be sellers who want to move up in the market but have limited options to choose from.