Now that the uncertainty of the federal election is behind us, there is a sigh of relief and a renewed sense of optimism for Ottawa’s largest employer, the federal public service. The new Liberal government is promising to mend fences with public servants and to invest heavily in Canadian infrastructure, which can only be done so with a healthy public service.
A Strong Public Service is Key to A Strong Ottawa Housing Market
A healthy public service, almost invariably means a robust and stable Ottawa housing market. Home buyers are also facing the prospect of increased mortgage rates, as an additional incentive to lock into a low rate and make a purchase decision in the near term.
During the marathon federal election campaign, there was a lot uncertainty as to which party would form our next government, and exactly how strong their mandate would be. At the outset of the campaign the liberals were in third place, and the NDP was the front-runner. Over the course of the campaign the lead changed hands between all three parties at various points, leaving the outcome relatively uncertain, until the final few weeks.
Most people thought there would likely be a minority government, and the only thing unclear was which party would win, and how long they would stay in power. This kind of uncertainty would not be good for the stability of the public service, or the health of the Ottawa housing market:
No one knows in that situation when the minority government may fall, and when there may be another election. Some pundits were saying that if it was a minority Conservative government, it could be toppled immediately. That kind of uncertainty has a depressing effect on the housing market. Ottawa Realtor Peggy Blair
A Liberal Majority is Good News for Public Servants
Now that the election is finally over and liberals have won a clear majority, and have begun to implement their promises and policies, many in the public service are breathing easier.
Core elements of the Liberal election platform centred on reinvesting in Canadian infrastructure, assisted by a revitalized public service, and acknowledging that some level of short-term deficit spending would be necessary:
The election of Justin Trudeau’s Liberal party will mean “modest” deficits for Canadian taxpayers, but probably more security for the 100,000 or so federal government workers in the nation’s capital. Ottawa Sun
Although the Liberals have not announced any big waves of hiring in the public service, there has been no indication of significant cuts. Rather, the new government wants to shore up relations with its employees, as outlined in an open letter to public servants in the final weeks of the election campaign:
The letter hits all the worrisome issues for Canada’s public servants, of which nearly 108,000 work in the [Ottawa] region. These include:
- a new mandate to negotiate a sick leave deal rather than impose one,
- a promise to “revisit” the legislation that rolled back collective bargaining rights in the public service,
- pledging to unmuzzle scientists and appoint a Chief Science Officer, and
- bringing back the long-form census and to make Statistics Canada independent Ottawa Citizen
A revitalized public service that is empowered with collective bargaining rights, an appropriate sick leave deal, the freedom to express scientific findings, and more in-depth information with which to analyze and develop public policy will bode well for the stability and moral of federal government employees; increasing the likelihood that they will work and purchase homes in Ottawa with a view of staying in the national capital region for the longer term.
Mortgage Rates Are Going Up In Canada
There is additional pressure for homebuyers to lock in their mortgages in the near term as mortgages rates are beginning to creep up, after a long period of record low rates:
Lenders have already begun boosting their mortgage rates from their September lows. Five-year, fixed-rate mortgages, which represent the largest share of Canadian mortgages, have risen by as much as 20 basis points in the past two months as Canadian government bond yields have moved higher. Globe and Mail
Variable mortgage rates are also starting to rise, despite a drop in the prime rates offered by the big banks, which has caught many by surprise.
Furthermore, fixed mortgage rates in Canada now face additional pressure as the U.S. Federal Reserve raised its key lending rate this month, putting even more pressure on the Canadian bond market, which is tied to the U.S. bond market.
Hatch Can Help You Sort Through Your Mortgage Options
This could all translate into a significant increase in activity in the Ottawa housing market in the coming months. For buyers and homeowners looking to apply for a new mortgage or to renew or refinance an existing mortgage, wading through the possible options can be time consumers and a little daunting. Fortunately, Hatch allows you to conveniently apply for your mortgage online, with the full backing of an experienced mortgage broker. Due to our low overhead, we also offer some of the most competitive mortgage rates you will find anywhere in Canada.