A significant divide has opened up in Ottawa’s housing market, as the city’s economic centre of gravity shifts to the west. The split has been growing for months but rarely has it been as clear as it was in August.

While the benchmark price for single family homes climbed 6.6 per cent year over year across the city to $398,400, the districts posting the largest gains are all in the west. In sharp contrast, nine of the ten districts reporting the slowest growth in resale house prices were in the east, according to detailed data published this week by the Ottawa Real Estate Board.

“There’s no high-tech hub in the east to help drive the demand there,” said board president Rick Eisert, who added the new west-end headquarters of the Department of National Defence is also starting to influence house prices. An estimated 5,000 of DND’s 16,000-plus local employees live in the east end of the city. As these positions are transferred to other military bases across the country, DND newcomers to Ottawa are opting for homes in the west end.

Moving DND workers into the former Nortel site has been a slow-motion process, but hundreds are now working on site with the full 8,500 expected by 2020 or thereabouts.

Ottawa's great housing divide

It’s no coincidence that fully half of the 14 real estate districts reporting the strongest growth in the price of single family homes lie just to the east of the new DND headquarters. In the Woodroffe district for instance, bounded on the west by the Sir John A. Macdonald Parkway and on the east by Woodroffe Avenue, the benchmark price in August was $426,200, up 15.4 per cent compared to a year earlier.

Benchmark prices, developed by the board and other regional agencies, are based on an index that reflects multiple housing characteristics such as roof type, number of bathrooms and age of the property, and offers a more consistent view of underlying trends.

The fact that relatively few houses are up for sale is also pushing up prices in the west end.

“DND has certainly played a role but low inventories mean there are many cases of multiple offers,” said Kevin Grimes, broker of record and owner of Re/Max Affiliates Realty Ltd. “That can cause a bigger price jump,” he added. 

The strongest pocket for gains in resale values in August was directly north of the Ottawa International Airport and east of the Rideau River. In Hunt Club-Windsor Park, the benchmark price for single family homes surged 20 per cent compared to a year earlier to reach $456,600. Nearby districts Mooney’s Bay-Carleton Square and Billings Bridge-Riverside saw house price gains of 17.3 per cent and 14.6 per cent for respective benchmark values of $478,900 and $458,700.

Ottawa's housing market

The big draws in these districts are locations within a reasonable commute of downtown and the west alike, along with prices that are so far well below those in trendy Westboro and Glebe.

Despite the fact that increases in resale home values are lagging east of the city’s Bank Street dividing line, real estate agents are still reporting plenty of sales.

“Inventory levels aren’t as low in the east as they are in the west,” said Grimes, who maintains offices in both areas, “but we’re seeing multiple offers in the east as well.”

Indeed, all districts monitored by the Ottawa Real Estate Board reported growth in the resale price of single family homes last month. Vanier, where prices edged up just 1.6 per cent year over year, recorded the smallest gain. The benchmark price in Vanier was $329,800 — the second lowest after Carlsbad Springs ($325,800).

The highest benchmark price for single family houses in August could be found as you might expect in Rockcliffe Park ($1,516,300, up 6.1 per cent) and New Edinburgh-Lindenlea ($764,600, up 7.6 per cent). It’s a reminder that while house appreciation may be weaker in general in the east, parts of it remain the most exclusive in the city

Published on: September 7, 2017 | Last Updated: September 7, 2017 5:51 PM EDT Ottawa Citizen

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