The February 2023 new-home sales were nothing to write home about, but there is a small sign of life.
“As expected, the 2023 Ottawa new-home market is off to a slow start,” says Cheryl Rice of industry analyst PMA Brethour Realty. “Since bottoming out in the fourth quarter of last year, sales volumes are improving but with only marginal month-over-month increases.”
In its latest monthly report prepared for the Greater Ottawa Home Builders’ Association, PMA reports 162 new-home sales in February, which is down 75 per cent compared to February last year, when the number stood at 662.
Rice says product affordability, high interest rates, inflation and uncertainty about the future “continue to challenge the consumer’s ability to purchase.”
Sales in February were up 35 per cent from the 120 reported in January but are still well below the five-year average for the month of 469. For the year to date, sales are 282, down 77 per cent compared to last year’s 1,253 sales.
The small ray of hope? While sales this February were down 75 per cent compared to last February, that’s better than the 80 per cent they were down in January versus January 2022. There are also signs of hope in the February resale numbers, which are inching closer to the five-year average.
“To sell homes under these current market conditions, some builders responded by reducing their prices by up to $100,000 on towns and singles, offering time-limited promotional prices, special promotions on inventory homes and other unadvertised incentives at point of sale,” Rice says.
Townhomes were particularly popular in February, capturing 69 per cent of the market share, while the south end attracted the highest percentage of sales at 46 per cent. And builders Minto Communities and Mattamy Homes grabbed the lion’s share of sales, scooping up 67 per cent of sales between them.
While Rice expects the first half of this year to be bumpy, her firm is predicting an improvement in the second half of the year.