Real estate market cools in December

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Home sales in Ottawa dropped 11 per cent year-over-year in December, which meant the local real estate market finished the year slightly behind 2011 levels, figures released Friday show.

A total of 618 properties changed hands last month, according to the monthly report from the Ottawa Real Estate Board. That’s down from 695 properties sold during the same month the year before.

The number of properties sold in 2012 also decreased to 14,308 from 14,389 in 2011.

Home sales were on pace to increase during the first part of the year, the OREB said in a news release, but soon dropped off during the summer months.

OREB President Tim Lee believes tighter federal mortgage rules were largely to blame.

“Although the government has succeeded in its plan to ‘cool down’ the market, Ottawa remains steady and balanced, devoid of large fluctuations in resale activity,” said Mr. Lee in the news release.

The most recent change happened last June, when Finance Minister Jim Flaherty shortened the maximum term for an insured mortgage from 30 years to 25.

Mr. Lee said the spectre of layoffs in the federal government, one of the region’s largest employers, also played a role in the slowdown.