Slower May after record-setting April: could it be the HST?

Members of the Ottawa Real Estate Board sold 1,694 residential properties in May through the Board’s Multiple Listing Service® system compared with 1,967 in May 2009, a decrease of 13.9 per cent. Of those sales, 353 were in the condominium property class, while 1,341 were in the residential property class.

“Many of the sales that would normally have occurred in May were pulled back to April, due to buyers trying to avoid the May 1st transitional implementation date for the HST, as well as new mortgage regulations that came into effect April 19th,” said Board President Pierre de Varennes. “Buyers knew they would be paying eight per cent more for all of the service costs associated with a real estate transaction if their closing date was after July 1st, and that it might be more difficult to qualify for financing, so they moved quickly to avoid either situation. In addition, by comparison May 2009 was a record-breaking month as the floodgates opened on pent-up demand following the brief downturn in the market,” he added.

The average sale price of residential properties, including condominiums, sold in May in the Ottawa area was $333,408, an increase of 6.9 per cent over May 2009. The average sale price for a condominium-class property was $246,111, an increase of 6.4 per cent over May 2009. The average sale price of a residential-class property was $356,387, an increase of 8.3 per cent over May 2009.

With particular reference to single level condominium apartments, MLS statistics for May 2010 show a total of 174 sales of apartments – an increase of 13.7 per cent from May 2009. May 2010’s average sale price was $259,849, an increase of 1.9 per cent over the previous May. Of course these figures are averages for the entire city.  If you would like more specific statistical information, just call me.

With our resale market having steadied somewhat, there is more opportunity right now for buyers to feel less rushed into making their decisions. However the threat of higher mortgage rates in the future will continue to fuel the resale market.