Moribund condo market slows rise in Ottawa home values

A sluggishcondo market and federal government layoffs are being blamed for the relatively low increase inaverage property assessments for Ottawa, but certain neighbourhoods are bucking the trend.

After posting a whopping 25 per cent increase for the assessment period ending five years ago, the average assessment increasefor homes and vacant land between2012 and 2016 slowed to just 3.6 per cent, according to the Municipal Property Assessment Corporation.

(The city reported the four-year increase at 3.4 per cent. The difference stems from the fact that the city uses an average, while MPAC uses a median value to express the property assessment increase.)

• Ottawa MPAC assessments rise just 0.9% a year

That's not just well below the provincial average of 18 per cent to say nothing of the 40-per-cent increases being seen in the Toronto area but it even falls short of the fiveper cent average foreastern Ontario.

"If we look at the market over the last four years and some of the things that are happening very locally here in the city of Ottawa, we're a biggovernment town," city deputy treasurer Wendy Stephanson told reporters Monday during a technical briefing.

"We know that the federal government had also done some downsizing, and I think some of that has affected the market, and the slowness of the prices."

Demand for condos dries up

A once-growingdemand for condos also appears to have come to ahalt assessment valuesfor condos actually fell five per cent, dragging down the city-wide rate, while assessments forsinglefamily dwellings rose 4.6 per cent.

The assessment for vacant landsjumped eight per cent.

Fourteen of the city's 23 wards saw increases of less than the Ottawa average. The downtown Somerset ward's average property assessments actually contracted by 0.2 per cent, largely due to the stagnant condo market.

At the other end of the scale is Somerset's next-door neighbourKitchissippi ward, which saw a sevenper cent jump in assessed home values.

"I'm not surprised," said KitchissippiCoun. Jeff Leiper, pointing to the "intensifying and gentrifying" neighbourhoods of Hintonburg, Mechanicsville and Wellington West.

"The public transit service we're going to get with LRT here is automatically making this a more attractive neighbourhood."

Rideau-Goulbourn, KanataSouth and Stittsvillealso saw theirassessments jump more than five per cent. Those increases are thought to be fuelled not just by higher home values, but also byan uptick in land speculation, which isdriving up the priceof vacant property.

Assessments spike for some

The city's deputy treasurer confirmed that 15,000 homeowners will see a sharp spike in assessments of more than 13 per cent when their notices arrive in the mail this week. That's a small portion of the291,000 properties assessed, but a big jump for those homeowners.

I would encourage everyone to take a look at their notice of assessment. Ask themselves a very simply question:Could I [have sold] my property on January 1, 2016 for this amount?- Wendy Stephanson, deputy city treasurer

"We look at typically notifying folks who are at 10 per cent over the average, just to give them an additional heads-up to take a second peek, just to make sure the assessment makes sense," said Stephanson.

"Frankly, I would encourage everyone to take a look at their notice of assessment. Ask themselves a very simply question:Could I [have sold] my property on January 1, 2016 for this amount?"

If the answer is no, homeowners have until November toapply for a reconsideration. About three per cent of homeowners do so in the first year of a four-year assessment period, but fewer than half are successful.

The amount of tax revenue cities collect isn'tbased on property assessments. Any changes in how much tax property owners pay due to a re-assessment is separate from tax increases levied by city council.

Ottawa homeowners whose assessments came in above the average rate can expect to pay more tax, while those whose assessed value fell below 3.6 per cent will pay less.

MPAC values Ontario properties every four years for municipal tax purposes. The agency looks at five criteria: location; lot size; amount of living space, age of home and quality of construction. Howeverthe single largest factor in assessing a home is the recent selling prices of nearby real estate.