Chris Heard

Canada Mortgage and Housing Corp. analyst Sandra Perez Torres believes the Ottawa housing market will fall much slower and rebound much quicker than other Canadian markets.

"Things are definitely slower in the housing market and the economy and we have revised our forecasts. But I am optimistic that things will hold their own for the rest of the year rather than sink."

Average Ottawa resale house prices are forecast to rise 0.5 per cent this year to $292,000 as sales fall 13 per cent and construction starts drop about 18 per cent. Things will be about the same in Gatineau. House prices are projected to rise 0.5 per cent year to $196,000 this year.

That might not seem like much reason to celebrate. But CMHC is predicting that Toronto prices will drop 4.2 per cent this year to $364,000 and a further 1.4 per cent in 2010. It is forecasting prices will drop six per cent in Calgary to $380,000 and 5.4 per cent in Edmonton to $315,000 before gaining some lost ground in 2010.

"I am optimistic because we are much stronger condition that the rest of Canada," she says.

One reason is that Ottawa is much less exposed to the U.S. and broader Canadian economic slowdown -- with the notable exception of a staggering technology sector.

Consumer confidence is in the dumps and most people are not buying Ottawa houses or other big-ticket items right now. But the fundamentals of the Ottawa economy are still intact: a broad and growing government, retail and services sector and healthy household incomes.

With little evidence of significant bubbles in Ottawa housing prices from the past, she says the recovery could come quickly. She is predicting Ottawa house prices will rise an average of $5,000 in 2010 to $297,000.

While the number of resale transaction has dropped, Perez Torres says the ratio of sales to new listings has already started to rebound. She is predicting that sales volumes this year will be slightly above the average over the last 15 years.

While construction will drop nationwide to the lowest level in nine years, she predicts that in Ottawa, it will be the lowest in only four years -- and in line with the average for the decade.