While home sales are expected to cool in Ontario this year, Ottawa is one of four cities in the province that will enjoy greater stability, the Canada Mortgage and Housing Corporation said Tuesday.
Ottawa, Hamilton, Thunder Bay and Kitchener have the tightest resale markets in Ontario, the CMHC stated in its 2009 second-quarter housing market outlook released Tuesday. In the meantime, home prices in urban markets tied to auto production and U.S. trade, including Windsor, Oshawa and St. Catharine's-Niagara, will fare the worst.
"Compared to the rest of Ontario, and even the rest of Canada, Ottawa is doing well," said CMHC senior market analyst Sandra Perez Torres. "Employment is increasing. We've had the public administration sector increase by 4.3 per cent in last four months, services increased 1.6 per cent and construction increased by 26 per cent. Overall, it's a positive outlook."
The report stated that slowing conditions will result in Ontario home prices falling 5.1 per cent this year — putting buyers in the driver's seat — but that there will be a "modest pickup in 2010."
"Stable labour market conditions... will help boost housing demand in 2010," said Ted Tsiakopoulos, CMHC's Ontario regional economist.
But for now, this means "a good opportunity for people to jump into the home ownership markets," said Perez Torres. "Buyers will benefit from several factors, including more affordable housing and interest rates which are very low now."
While CMHC's Ottawa Housing Market Outlook stated that residential construction activity will slow in 2009 — down from a four-year peak last year — balanced resale market conditions throughout most of 2009 have also led to a 10.1 per cent decline in MLS sales transactions and a 0.5 per cent reduction in the average MLS price. In Ottawa, the average price is set to reach $289,000 in 2009, Perez Torres said.
But despite what may sound like bad news, "overall, we have a very stable housing market," she said. "In terms of sales, we're doing very well."
The decrease in average housing prices is not due to the value of homes going down, Perez Torres said.
"It's due to people buying more affordable homes. We have more townhouses and condos being sold."