On the surface, it looks like the June 2023 new-home sales are an astounding improvement over the previous year, but you have to look deeper to get a true picture of how the Ottawa market is performing.
There were 213 sales in June, which is up a whopping 111 per cent over June 2022, according to the latest report prepared by industry analyst PMA Brethour Realty Group on behalf of the Greater Ottawa Home Builders’ Association.
That sounds great, until you realize that 2022 is an atypical year to compare against. By June of last year, the new-home market, which had been red hot through the pandemic, was very much out of gas and had ground to a halt, thanks to soaring home prices, steadily increasing interest rates and an uncertain economy.
June 2022 saw just a paltry 101 sales, making a poor comparison for this June. Mind you, looking at some of the years preceding gives a skewed look as well — 2019 and 2020 both saw higher than usual sales in June, for instance.
But checking 10 years’ worth of Junes, a better picture emerges of how slow the market still is, despite the uptick in sales compared to this time last year.
In fact, looking at sales for the year to date, we can see that 2023 is so far shaping up to be a poor one on the new-home front. By the end of June, there were just 1,359 sales, down 42 per cent compared to last year’s 2,335. While last year benefited from a very strong first quarter, it’s unlikely we’ll see a similar boost through the second half of this year since the conditions that stalled the market have not changed.
“The additional quarter per cent increase (in the Bank of Canada’s prime rate) announced on July 12 has further set the stage for a quiet summer for new-home sales, as consumers with variable mortgages, credit line debt and other loans pay more towards interest and less on housing and other spending,” says PMA Ottawa president Cheryl Rice.
Townhomes remain a popular choice for buyers, capturing 54 per cent of the market share in June. And Rice notes that for the year to date, the share for towns was even greater at 58 per cent, “continuing to represent a significant shift to more affordable housing over the past year. Market share of condo towns, another popular product choice for price-conscious buyers, comprised 15 per cent of sales in June, compared to a three per cent share in 2022, showing substantial growth in sales for this product type.”
And as it has for some time, the south end of the city, with the highest density of new-home projects, dominated sales across all product types except for condo apartments, she notes.
