Ottawa’s renovation market is healthy — even booming — says Ted Tsiakopoulos, Canada Mortgage and Housing Corporation (CMHC)’s Ontario regional economist.
Instead of looking for new or resale homes, homeowners are electing to renovate their existing residences, he told the annual Ottawa Housing Market Outlook conference.
“Ontario’s economy, while it has regained some of its lost momentum, the economy isn’t growing,” he said. “We are bullish on the renovation and resale markets. Renovation spending has been nothing short of exceptional.”
In contrast, CMHC observes there is a mass of unsold condominiums, and things in that sector may become more challenging in the months ahead because even more units are expected to flood the market in the next few months.
CMHC Ottawa market analyst Anne-Marie Shaker said there are more than 589 new condo units are for sale on the market. , there is an eight-month supply of available condos, she told the conference.
“We see a lot of oncoming supply and active listings at the moment,” she said.“Listings continue to go up and sales have plateaued. Condominiums alone are on the edge of being a buyers’ market.”
This could result in further price decline for condos, continuing a trend over the past three years, even as single family homes rise.
That’s bad news for existing condo owners because it could bring further price drops in a market that has already seen three years of decreases — 5.6 per cent in 2013, 7.3 per cent in 2014 and one per cent so far this year — even as prices have been rising in the residential, or non-condo, category.
The housing agency suggests that builders have misread the market and overbuilt condominium units, but also that first-time buyers, a key market for condominium sales, are increasingly opting to delay their purchases or to buy residential houses.
Shaker said builders are already cutting back on condo construction. In the first nine months of 2014, builders began 1,100 units. During the same period this year, only 700 were completed.