According to a new study by Edelman, one-third of the Canadian population is optimistic about the nation’s prospects over the next five years. This positive uptick can be partly attributed to the “honeymoon phase” of the newly-elected Liberal government in Ottawa.
Experts have dubbed this the “Trudeau Effect,” noting that the general sense of optimism was spilling over into the real estate market. According to recent housing statistics and Ottawa-based experts, the Liberal government has helped to strengthen the demand for residential housing in Ottawa.
RE/MAX Hallmark Realty Group said that close to 6,850 residential homes were sold in Ottawa in the first half of 2016, an increase of almost 6% from the same period last year. Moreover, condominium sales in Ottawa rose nearly 5%.
According to Michael Bird, a lawyer and sessional instructor in real estate law at the University of Ottawa, this upward trend is indicative of the nation’s 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,” Bird explained. With people more confident about their jobs, they’re more likely to make investments in the housing market.
Key neighbourhoods in Ottawa are experiencing stronger demand from home buyers and renters than others. The Glebe and Westboro have traditionally been in strong demand and continue to be in strong demand this year. Neighbourhoods adjacent to future LRT stations have also experienced an uptick in demand.
Ottawa hasn’t experienced the foreign-driven real estate boom of hot spots like Vancouver, whose market has only cooled because of a 15% foreign tax implemented this summer. Neither has Ottawa experienced the intense condominium development of Toronto, though the market for condominiums in Ottawa remains steady.
“As long as the interest rates stay low, I feel that confidence in purchase rates [in Ottawa] will stay the same. The interest rate situation would be the driver for purchasing versus renting. It’s smarter money,” explained Bird. “As long as the rates stay low, I would think the same trend would continue.”
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