The Way Home is a series looking at the issues and challenges for people who are in the market for a home.
The Trudeau Effect hasn’t just boosted Canada’s foreign relationships, image or voter morale. The one-year-old Liberal government has also helped to buoy residential housing in the nation’s capital, according to recent housing statistics and Ottawa-based experts.
ReMax Hallmark Realty Group states that close to 6,850 residential homes were sold in the first half of 2016, up almost 6 per cent from the same period last year. Meanwhile, condominium sales in Ottawa rose close to 5 per cent.
Michael Bird, a lawyer and sessional instructor in real-estate law at the University of Ottawa, says this trend is indicative of history with Liberal governments.
“There tends to be, with a Liberal government, a philosophy of bigger government that tends to put civil servants at ease. There’s less of a threat of job cuts, it would seem, based on the Liberal philosophy versus the Conservative one under Mr. [Stephen] Harper, who was paring everything down,” he explains.
Mr. Bird, who has practised law since 1994 and now mostly specializes in real-estate litigation, says buyer confidence is key with respect to this current market trend.
“With that kind of security, I believe it creates confidence, and perception can become reality,” says Mr. Bird. “If people are confident that their job is secure, they are more likely to proceed to get into the housing market.”
Jeff Hooper of ReMax Hallmark in Ottawa says the Liberal government has brought a renewed sense of optimism and a feeling of stability in the capital’s marketplace.
“The infrastructure projects are well under way – like light rail – and the little city is growing up,” Mr. Hooper says. “Especially exciting is our 150th-year celebration [next year]. There will be a lot of focus on Ottawa.”
Key neighourhoods in the city are already experiencing stronger demand than others, according to Mr. Hooper. The Glebe (about 10 minutes south of downtown and anchored by Lansdowne Park, the home of the Canadian Football League’s Ottawa RedBlacks and numerous shops and restaurants) and Westboro (an upscale neighbourhood about 15 minutes west of the downtown core) have traditionally been strong and have continued to be in 2016.
Meanwhile, neighbourhoods adjacent to future light-rail train (LRT) stations have experienced an uptick in demand as well, according to ReMax.
The Department of National Defence and the Royal Canadian Mounted Police’s headquarters are also set to move to Ottawa’s west end, which is helping to bolster buying activity in Kanata, Barrhaven and Stittsville – three subdivisions of Ottawa.
All these factors are contributing to what Mr. Hooper says could be a “record” year.
“We’ve had a very strong market this year, the results just came out in August, and I think we’re on the way to a record year,” he says. “It’s with these small increases of sales and small incremental increases in price. Volume and price will both be up this year.”
Ottawa hasn’t had the boom of foreign investment like Vancouver, whose market has only cooled because of a 15-per-cent foreign tax implemented this summer, or the intense condominium developments like in Toronto, but the market remains steady.
“There is a degree of intensification of residential use in the downtown [Ottawa] core, so you see an increase in condo purchases, but we don’t see the kind of spikes like in Toronto. Talk about intensification,” says Mr. Bird. “The downtown looked like something from Blade Runner [a futuristic movie from 1982 set in a dystopian Los Angeles, filled with towering structures]. I’ve never seen so many condos in one place.”
But there’s rationale for why Toronto is looking the way it does, according to Mr. Hooper.
“The net migration in Toronto is huge. It’s unaffordable to buy a home for the average person in Toronto proper. That’s why the city keeps expanding and condos are going up. Families are moving into condos because they don’t want to do the commuting for business [or] maybe there are different schools downtown. They sacrifice housing for location,” he says.
“We don’t see that in Ottawa, not in our lifetime. This is the little city that’s growing up. We’ve been very fortunate.”
And with nearly three more years left for Mr. Trudeau’s Liberal government – it won a majority in the 2015 election – the trend in Ottawa shows no sign of winding down, according to the experts.
“As long as the interest rates stay low, I feel that confidence in purchase rates will stay the same. The interest rate situation would be the driver for purchasing versus renting. It’s smarter money,” explains Mr. Bird. “As long as the rates stay low, I would think the same trend would continue.”Report Typo/Error
Follow us on Twitter: