From January 1 to August 31, 2017, some 2,518 condos sold in Ottawa, compared with 2,020 during the same period in 2016.
“Condominium inventory has reduced slightly and the rate of sales is up,” explains Patrick Morris. “Although the condo market is not back to where it was in 2011, condo sales are improving, and that’s positive.”
This boost has helped Ottawa’s real estate market to maintain steady sales into the summer. Members of the Ottawa Real Estate Board sold 1,538 homes in July (359 condos and 1,179 residential properties), compared with 1,481 in August 2016. The most active price range for residential property sales continued to be between $300,000 and $499,999, accounting for more than half of residential property sales. For condos, the most active price point is between $150,000 and $249,999.
The RBC Housing Trends and Affordability report for June 2017 noted that Ottawa’s real estate market has stayed reasonably affordable and steady—especially compared with the volatile GTA—and that this may attract buyers to the area. While there was a decline in new Ottawa listings in the winter and spring of this year, which shifted the balance in favour of sellers, that trend is reversing.
“We were in a seller’s market for much of the year,” observes Patrick, “but now the market is more balanced, with more inventory, which is good for buyers.”
In a seller’s market, demand for houses is high and inventory is low, making conditions favourable for those who want to sell. Generally, when more than 25 per cent of listings sell in a given month, that puts the market in seller’s territory.
In a balanced market, there is a buyer for every listing—a good situation for both buyers and sellers—and the rate of sales is in the 15 to 25 per cent range.
In a buyer’s market, the number of properties available for sale is high, giving buyers a lot of latitude. When less than 15 per cent of the inventory sells in a given month, that puts the market in buyer’s territory.
As the graph shows, Ottawa’s market for residential properties (i.e., houses) spent much of the past three years in balanced territory. From January 2017 until late June, it became a seller’s market. Since the summer began, the sales to inventory ratio has gone back down, however, which is rebalancing the residential property market.
Condos were another story. For much of the past three years, the condo market was overloaded with new inventory, and sales were slow. This year, however, with the decline in inventory and the rise in sales, condos have moved back to balanced territory.
Patrick anticipates that sales activity will continue to be steady going into September and October. Even though interest rates have increased in July for the first time in seven years, and then again on September 6, he says it will take some time for the effects of the rate rise to become apparent: “Demand is so high in the entry-level market that the interest rate rise may not have a dampening effect, at least not until the spring.”