The dizzying, bionic two years of a record-setting sales pace in Ottawa’s real estate market has certainly slowed and realtors describe a return to normal levels.
That return to normalcy though has stirred up fears and many misconceptions, says Taylor Bennett of Bennett Property Shop Realty.
Bennett is the co-host of The Bennett Real Estate and Wealth Show on Newstalk 580 CFRA and regular contributor to CTV Ottawa’s News at Noon.
“I spend a great deal of my time acting as a therapist for people who are worried about the market,” says Bennett
He says he hears many myths and misconceptions, many times a day, every day from nervous clients. He wants to correct them to help quell clients’ anxiety.
Taylor Bennett on Five Current Myths
Myth: “Sales are down, the market is crashing”
“While sales are down compared to last year, it’s important to put the last year into context – 2021 was the best year for real estate, setting both sales and price records,” Bennett says.
“So, a comparison to the best year on record is like comparing an NHLers season stats to Wayne Gretzky’s best year – it’s not going to look very successful. But when you pull back and take a broader look, we are currently on the same pace as we were in 2019 – the third best year on record.”
Myth: “There are no more multiple offers, I can low-ball sellers”
“While it’s true that there are fewer multiple offers than before, there are still some occurring on well-priced and unique homes. But even in transactions where it’s one seller vs one buyer, on average, homes are selling for $10,000 more than their list price so buyers should be prepared to pay the asking price,” Bennett said. “However, buyers do get an advantage as they now have the opportunity to perhaps work in a condition or two for added protection.”
Myth: “Homes are taking longer to sell, sellers are panicking”
“Homes are, in fact, taking 55 per cent more time to sell; but to add some context, the average days-on-market has increased by only one week from 13 days to 20. Again, we have become accustomed to seeing homes sell in less than a week, but that was extremely unusual for Ottawa,” Bennett says.
“In June 2019, on average it took over 35 days for a home to sell, and that was considered exceptionally quick at that time. Plus keep in mind, that there is a difference between the selling date and the closing date – many sellers are looking for closing dates in the 90-day range, so if a sale takes a few weeks longer they still have ample time for their desired closing date.”
Myth: “I missed the best opportunity to sell. There are no more record-setting prices”
“Since the end of 2019, prices in the Ottawa market have increased by over 64 per cent (From $441,693 to $727,556)! That type of growth would normally take almost 10 years to achieve, but it took only 30 months,” Bennett said.
“So, if you are still thinking of selling, while you may not set a record price for your neighbourhood, if you bought your home before 2019, your home has likely increased well beyond the value it would be if Ottawa had its typical increases.
“But it’s important to keep in mind that setting a record price doesn’t necessarily mean you made the most profit – even though you may sell for less than your neighbour, if you paid less and/or put less money into your home (renovations, updates, etc.) than it’s likely your return-on-investment would be far greater than your neighbour.”
Myth: “With mortgage rates on the rise, people will default on their mortgages”
“The rising interest rates have undoubtedly had an impact on the market. In fact, that was one of the major reasons why the mortgage interest rates were increased, to help stabilize the markets. But mortgage rates are roughly at the same level that they were in 2019 – again, the third best year on record. The most recent increase was announced last week at 100 basis points, or one per cent. While one per cent may seem like an insignificant number, that rise decreased buying power by 10 per cent! But these increases weren’t announced overnight, many homeowners and buyers were able to lock in at the lower rates before they increased,” Bennett said.
“More importantly, when approving a mortgage loan, banks use a qualifying rate – which is approximately two per cent higher than your actual mortgage rate. Being risk-averse, banks build in this ‘buffer room’ to protect against an increase in the mortgage rates – which is precisely what is happening now. Which means, this recent rate increase shouldn’t impact current homeowners or any buyers who are working with a full-service brokerage and have locked in a guaranteed rate with a mortgage pre-approval. However, if you are a potential buyer shopping on your own and you simply used an online mortgage calculator to get pre-approved, it’s unlikely you have a guaranteed rate and this recent increase will have an impact on your purchase.”
OTTAWA – New research shows house prices in Canada’s suburbs grew faster than in downtown areas during the pandemic as remote work spurred a preference for bigger homes.
The Bank of Canada says in a study released today that the closure of many downtown services coupled with a desire for more living space increased demand and prices for homes in suburban areas during the pandemic.
The central bank says this shift weakened the so-called proximity premium typically associated with homes in more urban areas, which tend to be more expensive due to scare land, shorter commutes and better access to services.
The research shows that while house prices increased strongly in most neighbourhoods during the pandemic, the growth was strongest in the suburbs.
As a result, the bank says the real estate price gap between Canada’s suburbs and downtown areas — already narrowing steadily pre-pandemic — shrank considerably.
Yet the bank warns that if the preference shift is temporary, house prices in the suburbs could face downward pressure.
This report by The Canadian Press was first published June 20, 2022.
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OTTAWA – Advertising and public-relations agencies have been banned for working for Russian oil and gas firms as part of a new wave of sanctions designed to increase pressure on the Putin regime.
The latest round of sanctions following Russian President Vladimir Putin’s invasion of Ukraine includes a ban on the export of services, including engineering and accounting, to Russia’s oil, gas and chemical industry.
The new sanctions outlaw 28 types of Canadian consultants, including technical and management consultants and advertising agencies, from working for Russia’s oil, gas and chemical sector, which accounts for about 50 per cent of the country’s revenues.
Foreign Affairs Minister Mélanie Joly said “Canada will do everything in its power to prevent Putin’s ability to fuel and finance his war machine.”
Since Russia’s invasion of Ukraine in February, Canada has imposed sanctions on more than 1,070 individuals and entities from Russia, Ukraine and Belarus.
They include Alina Kabaeva, a former Olympic gold-medal gymnast, who is reportedly Putin’s girlfriend.
Canada has also sanctioned Azatbek Omurbekov, a military commander whom the EU has said is nicknamed the “Butcher of Bucha.”
When the EU imposed sanctions on him, it said he led Russian troops responsible for killings, rapes and torture in Bucha, a town outside Kyiv.
The massacre of civilians in Bucha is being investigated as war crimes, with the help of RCMP investigators from Canada.
Canada and the EU have also sanctioned Mikhail Mizintsev, a Russian general the EU said is known as the “Butcher of Mariupol.”
The general was involved in the siege and bombardment of the port city, which was obliterated by Russian artillery, killing civilians as well as Ukrainian troops.
Canada has also sanctioned Russian oligarchs and their families and banned the import of Russian caviar, vodka and diamonds.
At a G7 meeting earlier this year, Joly advocated for allies to also ban the export of professional services to Russia’s oil industry in protest at the invasion of Ukraine.
“The Russian invasion of Ukraine has now lasted over 100 days. In that time, Vladimir Putin and his regime have caused untold pain and suffering in Ukraine and across the world,” she said. “We will continue to relentlessly pursue accountability for Vladimir Putin’s senseless war.”
This report by The Canadian Press was first published June 8, 2022.
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