July 2020 new-home sales in Ottawa were once again on fire, but the hot market is not expected to last.
“It was another spectacular month of sales,” says Cheryl Rice, Ottawa president of industry analyst PMA Brethour Realty Group, before adding, “we continue to expect a softening of the market in late summer or early fall.”
In its monthly report prepared for the Greater Ottawa Home Builders’ Association, PMA reports there were 664 new-home sales, up 48.9 per cent compared to July of last year, when the number stood at 446.
Sales in July were also up 5.9 per cent over the 627 sold in June. Normally, sales decrease as we come out of spring and settle into summer, but the pandemic is wreaking havoc with typical patterns this year.
“Buyer demand for new homes was unwavering in July,” Rice says, noting that it was “the highest July sales we’ve seen in the past five years.”
And after plummeting sales in the early days of the pandemic had the city almost 20 per cent off the year-to-date sales pace of 2019, we’re now down just 6.3 per cent compared to last year, with year-to-date sales of 3,356 (versus 3,580).
The south end was the most active, capturing 50 per cent of the market, and singles dominated, both in the south end and throughout the city, registering 53 per cent of sales. Townhomes, in comparison, made up 39 per cent of sales.
“Townhome and single sales toggle position frequently over a 12-month period,” Rice says.
‘Prices remain affordable’
She also notes there have been numerous price increases across the city, some significant. “But higher price points have not discouraged determined buyers. Ottawa new-home prices remain affordable compared to other major markets, and we continue to attract buyers from those markets, such as Toronto.”
Even still, she expects the market to soften. “Ottawa is a hot market now driven by pent-up demand, but the key to market recovery will be job creation and immigration. The former will regain strength slowly and likely not until later this year — and certainly not to the levels of pre-COVID economic performance. The latter will not happen until a vaccine is in place.”
That pent-up demand is also being reflected in housing starts, with Canada Mortgage and Housing Corp. reporting a 24 per cent increase in July for Ottawa.
And Ottawa’s resale market remained hot in July, too, with sales jumping 19 per cent over the previous year.