Members of the Ottawa Real Estate Board sold 1,842 homes through the Multiple Listing Service in July 2019, compared with 1,605 sold in July 2018—an increase of 14. 8 per cent.
“It’s been very active, with the highest number of sales in July in 15 years,” says Rob Kearns, team leader and sales representative with the Morris Home Team. “The August long weekend tends to be pretty quiet, but now that we’re through that, the market is really going to pick up.”
Patrick Morris, real estate broker with the Morris Home Team, adds: “Also, for the first time this year, there was an increase in the number of new listings in July. Although the inventory is creeping up, the overall inventory is still low. For a stronger and more balanced market, there needs to be a three-month supply of listings to create an attractive arena for both buyers and sellers.”
Just over 40 per cent of residential homes sold in July were in the $350,000 to $499,999 price range, while 28 per cent were in the $500,000 to $749,999 band.
The most active price point for condos—$225,000 to $349,999—accounted for 52 per cent of the units sold.
The tight rental market isn’t helping the low inventory situation. “People who need to downsize are remaining in their homes until rental inventories increase,” notes Rob.
There is likely to be some relief soon, though. “New condo developments will be online in the near future,” says Rob. “Right now, there are only a few developments—and the builders are doing their best to create scarcity by releasing only a certain number of condos at a time.”
As multiple developers in Ottawa are set to put more condos on the market, however, it won’t be possible for any single developer to control supply to the same extent.
“The condo market is hotter right now. It’s a supply and demand challenge,” observes Rob. “The supply is very low today compared with the last several years.”
Ottawa’s real estate market has been so active that it has been difficult to assess the impact of the mortgage stress test put in place by the federal government at the beginning of 2018. The stress test requires borrowers to prove that they could afford a mortgage if interest rates were to go higher.
“Coming through this period where we’ve had such high demand, the stress test has maybe helped to keep prices in check,” says Rob. “We’ve seen prices go up, but it is a measured increase—not an out-of-this-world increase.”
The average sale price for the year to date (YTD) in 2019 for residential properties was $484,964—an increase of eight per cent over the 2018 figure of $449,056. The average YTD sale price for condo units went up 7.4 per cent—from $278,072 in 2018 to $298,545.
Patrick Morris concludes: “The outlook for the balance of this summer and fall is a strong Ottawa market, due primarily to low interest rates and steady employment levels, along with the fact that the inventory.