Ottawa 30-second Real estate market update
Residential Prices ⬇️ 5 % from last year
Condominium Prices⬆️ 9% from last year
Affordability is the key here. Condos are usually at a lower price point than residential homes, so as interest rates have impacted the reach that buyers can obtain. Condominiums have become the more economical choice.
SUPPLY is ⬆️
2047 new listings came to market this past month.
We do not usually see so many new properties in October. The exception is 2020, where several properties held off until the last quarter to be listed after the first few COVID lockdowns.
DEMAND is ⬇️
987 properties sold over the last month
Typically we see about 1500 homes sold in October. The lower number of sales is due to higher interest rates impacting buyers’ affordability and speculation about where prices could be going.
The $500,000-700,000 price points remain the most in-demand range for buyers.
This represents larger condos, row & townhomes.
ABSORPTION RATE (Supply vs Demand)
How quickly new properties are sold and absorbed into the market
- January 2022 – 48% absorption rate
- February 2022 – 55% absorption rate
- March 2022 – 55% absorption rate
- April 2022 – 46% absorption rate
- May 2022 – 39% absorption rate
- June 2022 – 28% absorption rate
- July 2022 – 22% absorption rate
- August 2022 – 22 % absorption rate
- September 2022 -20% absorption rate
- October 2022 – 18% absorption rate
The trend continues with a climb in inventory. We currently have 3.3 months available to buyers. This means no new properties were to be listed; we would be sold out in just over 3 months. This feels like a lot of inventory, considering we had 0.6 of a month in March 2022.
This meets the criteria of a SELLER MARKET. The difference between now and previous times we had 3 months of inventory is the direction of the trends. We are moving into a balanced market.
A balanced market is 4-6 months of inventory and 6 plus months is a buyer’s market.
RE/MAX Hallmark Realty Group🏡
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OTTAWA, November 3, 2022 – Members of the Ottawa Real Estate Board sold 987 residential properties in October through the Board’s Multiple Listing Service® (MLS®) System, compared with 1,670 in October 2021, a decrease of 41%. October’s sales included 758 in the residential-property class, down 40% from a year ago, and 229 in the condominium-property category, a decrease of 44% from October 2021. The five-year average for total unit sales in October is 1,554.
“After the volatility of the past two pandemic years, which was unsustainable, the market is correcting and adjusting,” says Penny Torontow, Ottawa Real Estate Board President. “The slowdown is compounded by Bank of Canada interest rate increases, which further exacerbates buyer hesitancy and weakens people›s purchasing power— especially first-time homebuyers.”
“Demand is still high, and with increasing inventory available, Buyers have more choices and time to shop for their new home. However, the ongoing speculation about where prices and interest rates are headed shakes consumer confidence and has made some prospective Buyers take a waitand-see approach.”
“Sellers may be understandably concerned about market fluctuations, which have been more drastic lately,” she adds. “As with any major investment, a longer-term perspective is important. The significant year-over-year gains of the last two years were not sustainable. If you have owned your property for any length of time, your equity has increased significantly and will buffer price corrections. If you buy and sell in the same market, it is all relative.”
By the Numbers – Inventory & New Listings:
- Months of Inventory for the residential-class properties has increased to 3.3 months from 1 month in 2021.
- Months of Inventory for condominium-class properties has increased to 3 months from 1.2 months in 2021.
- October’s new listings (2,047) were 4% higher than 2021 (1,960) and down 14% from September 2022 (2,371). The 5-year average for new listings in October is 1,971.
“Buyers and Sellers need to carefully analyze their own unique circumstances. No one can predict with absolute certainty what will happen next year, but in the highly employed and stable Ottawa market, real estate has been and continues to be a good investment over time,” says Torontow. “They don’t have a crystal ball, but mortgage brokers and REALTORS® have the education, expertise— and most importantly, the data—to help people make an informed decision for their specific situation.”
By the Numbers – Average Prices*:
- The average sale price for a condominium-class property in October was $445,691, an increase of 9% from 2021.
- The average sale price for a residential-class property was $677,873, decreasing 5% from a year ago.
- With year-to-date average sale prices at $780,390 for residential units and $456,470 for condominiums, these values represent an 8% increase over 2021 for residential class properties and a 9% increase for condominium-class properties.
REALTORS® also help with finding rentals and vetting potential tenants. Since the beginning of the year, OREB Members have assisted clients with renting 5,186 properties compared to 4,012 last year at this time.
* OREB cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price will vary from neighbourhood to neighbourhood.