Housing supply

Soaring rents could be a factor in housing shortages, says OREB

Local housing prices continued to rise last month amid a supply crunch, prompting the city’s real estate board to suggest Ottawa’s frothy rental market could encourage investors to hold onto properties. income-generating properties rather than selling them.

The average residential-class home sold for just over $716,000 in October, a 19 per cent jump from a year ago, the Ottawa Real Estate Board reported Wednesday. The average condo price, meanwhile, rose 10% year over year to nearly $405,000.

Ottawa real estate agents sold 20 per cent fewer properties last month than a year earlier, the fourth consecutive year-over-year sales volumes fell.

OREB chair Deb Wright blamed a lack of inventory for the steady upward trajectory of prices, saying new buyers are being left behind as available properties are quickly bought up.

While October’s 1,960 new listings were just below the five-year average of 1,974, Wright said “that’s just not enough” to meet demand.

The city continues to have only about a month’s supply of resale homes, she said, leaving many potential buyers no choice but to stand still.

“Low inventory and lack of suitable housing options limit movement along the housing spectrum, Wright said. “Buyers moving out and those downsizing have nowhere to go so they stay put, but we need this exchange of properties in the market to free up supply for entry home buyers. range.”

While sales are down, the board says rental transactions are booming. OREB members helped rent over 4,000 properties in 2021, a 40% increase from a year ago.

Wright suggested owners of rental properties that might have put them on the resale market in the past are now holding onto homes and condos “for investment purposes” as the pipeline of potential tenants grows.

“This active rental market may be another factor as to why there aren’t more properties for sale on the market,” she said.