Ottawa home sales drop by almost half
Market tipping more toward buyers as interest rates and finances at play
Ottawa Real Estate Board members sold 846 residential properties in November, compared with 1,456 in November 2021 — a drop of 42 per cent but “expectedly low,” according to the board's president.
Sales included 658 homes, down 39 per cent from a year earlier, and 188 condos, down 50 per cent from November 2021. The five-year average for November is 1,270.
There's both a typical seasonal slowdown plus market conditions at play, OREB president Penny Torontow said in a release this week.
“This is not isolated to our local market,” she said. “Globally, we're still adjusting to the post-pandemic world and that affects demand, pricing, interest rates, cost of living, supply chain disruptions and more.
“As a result, those who can, are waiting and watching.”
The average sale price for a condo-class property in November was $415,533, down four per cent from November 2021. The average sale price for a residential-class property was $680,031, down five per cent from a year earlier.
But year-to-date average sale prices of $774,422 for houses and $454,436 for condos are up eight per cent over 2021.
“What's concerning about the current market is the impact on first-time homebuyers,” Torontow said, pointing to the drop in condo sales as a sign that even entry-level properties are being affected.
“Fluctuating markets, paired with the stress test, are keeping first-time buyers on the sidelines in a tight rental market — with MLS rentals increasing 27 per cent this year over last.”
Amid fears of a looming recession, the Bank of Canada raised overnight rates for the sixth time Oct. 26 to 3.75 per cent in hopes of lowering the country's 6.86 per cent inflation.
On Wednesday, the central bank hiked its key interest rate to 4.25 per cent — the highest it's been since January 2008. It announced the half-percentage point interest rate increase while signalling it might be ready to pause its aggressive rate hike cycle.
In Ottawa, months of inventory for residential-class properties has increased to 3.5 months worth from just under one month in 2021. For condos, months of inventory has increased to 3.4 months from 1.1 months in 2021.
At 1,598, new listings were up 12 per cent in November, from 2021 and down 22 per cent from October. The five-year average for new listings in November is 1,398.
“With nearly four months of inventory and an average 30 days on market, Ottawa now has a balanced resale market, slightly tipping toward the buyers,” said Torontow, who advises sellers to pick a Realtor with “hyper-local knowledge” of their neighbourhood for advice on when to sell and for how much.