The city’s tight housing supply is ‘not sustainable’ if a more balanced market is to be achieved in the coming months, the head of the Ottawa Real Estate Board warned Friday, as home prices increased by 19% in November compared to a year earlier.
The average residential-class home sold for $716,992 last month, up from just over $600,000 in November 2020, the council said. The average condo price, meanwhile, rose to $432,099 from around $361,000 a year earlier.
While noting that month-over-month price increases have “declined slightly” – average home prices last month were at the same level as October, while condo prices rose 7% from compared to the previous month – OREB President Debra Wright said the supply shortage that is driving up house prices remains a major concern for the industry.
“This is a much better situation than the monthly price increases we saw in the first quarter of 2021,” Wright said in a statement. “However, there is no doubt that supply constraints will continue to put upward pressure on prices until they are remedied.”
OREB said 1,430 new listings came to market last month, down from 1,960 in October and 13% below the November 2020 total.
Wright warned that the current one-month supply of housing inventory “is much lower than it should be” to meet demand.
November sales down
“While there are still about 30 units above the five-year listing average, this is simply not sustainable and takes us further away from a balanced market that will provide much-needed relief to potential buyers,” a- she added.
OREB members sold 1,459 residential properties in November, up from 1,605 a year earlier.
But Wright argued the 2020 numbers were skewed because the peak in sales shifted to later in the year due to the pandemic. She said November sales were up 14% from 2019, “a more relevant base year for comparison.”
Wright said last month’s figures should not be taken as a sign of a market slowdown, noting that the number of properties changing hands in November was still 8% higher than the five-year average of 1,348.
“And we’re also seeing an 8% increase in year-to-date sales compared to 2020, so it’s fair to say the resale market remains active and buoyant,” she said.
Real estate company Re/Max said earlier this week that it expects the city’s stock of available homes to increase somewhat in 2022, prompting it to forecast lower price increases in coming months.