Ottawa’s real estate market remained buoyant as temperatures plummeted in November, with prices rising 19%.
However, the Ottawa Real Estate Board warns that current housing inventory is “far below what it should be” to meet demand, driving up prices for buyers in Ottawa.
“It’s just not sustainable and takes us further away from the balanced market which will provide much needed relief to potential buyers,” said chairwoman Debra Wright, adding that fewer new homes were available on the market last month.
A total of 1,459 residential properties were sold in Ottawa in November, compared to 1,605 properties in November 2020.
“While November resale transactions were down from a year ago, that’s because the peak of market activity in 2020 shifted to later in the year due to the initial lockdown of the pandemic,” Wright said in a statement. “In fact, November unit sales were 14% ahead of 2019 (1,284), a more relevant base year for comparison.”
The Ottawa Real Estate Board says there has been an 8% increase in year-to-date sales in 2021 compared to 2020.
“So it’s fair to say that the resale market remains active and vibrant,” Wright said.
The Ottawa Real Estate Board says 1,430 new listings entered the market last month, down 27% from 1,960 new listings in October. The 1,430 new registrations in November represent 13% less than in November 2020.
“While the decline in new listing volume is typical for November, our inventory, one month’s supply, is well below where it should be,” Wright said.
The average price for a residential-grade property in Ottawa in November was $716,992, up 19% from a year ago ($603,146). The average price of a condominium sold was $432,099, up 19% from 2020 ($361,800).
Year-to-date, average new home sales prices have risen 24 per cent in Ottawa in 2021 to $719,956. The Ottawa Real Estate Board says month-over-month price accelerations “have come down slightly,” with average prices in November comparable to October.
“This is a much better situation than the monthly price increases we saw in the first quarter of 2021,” Wright said.
“However, there is no doubt that supply constraints will continue to put upward pressure on prices until they are remedied.”
SUPPLY PROBLEMS IN OTTAWA
The City of Ottawa is reporting 9,239 new housing starts in 2020, the highest number of new housing construction beginning in the capital since amalgamation in 2001.
Kevin Grimes of Remax Affiliates Realty tells Newstalk 580 CFRA’s Ottawa Now that supply will continue to pose a challenge for Ottawa’s housing market.
“It’s far from enough,” Grimes said. “If you constantly hear the problem of supply and the population of Ottawa increased in the same year by more than 16,000 people. So 16,000 people came to the city and we started 9,200 new builds – that’s just not enough.
Grimes says Ottawa needs to start building new homes to keep up with demand.
“At the end of the day, we’re not building enough houses right now.”
A new Remax report this week estimates home prices will rise 5% in Ottawa in 2022.
“In a nutshell, I would say our lack of supply,” Grimes said when asked what is expected to drive home prices higher in 2022.
“We definitely have a supply problem in Ottawa, we’ve had it for a while, but it seems to be getting worse right now.”