Ottawa new home sales dropped dramatically in June — but that drop is misleading.
There were 427 sales recorded, down a whopping 39 per cent compared to the record 702 homes sold in June 2017, according to the Greater Ottawa Home Builders’ Association monthly new home report, which is compiled by industry analyst PMA Brethour Realty Group.
But last year’s performance “was truly an anomaly that was destined to outshine June 2018 sales,” says PMA Ottawa president Cheryl Rice in a market update. The unusual activity in June 2017 saw sales almost double those of the year before, and well above the then-five-year average of 570, thanks to a red-hot Ottawa market.
This June, sales were more in line with late spring expectations at one per cent lower than the average, although they are down about 11 per cent for the year as a whole.
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Feedback Rice has been getting from the builder community suggests mortgage stress tests and interest rate increases have pushed some buyers out of the new home market for the time being.
Demand for townhomes is another factor. While towns and single-family homes typically jockey for top market share, for the past year and a half PMA has reported towns reigning supreme, and not giving up top spot until May.
But, she notes, “the ever-increasing demand for townhomes has taken a toll on supply, leaving many projects entirely sold out.”
Townhome shortages
At least a dozen new home communities across the region are either temporarily or permanently sold out of towns, with new releases delayed in the approval process or not available until a new phase comes on line. And that shortage is leading to some buyers holding off on buying while they wait for more choice.
Sales were highest in the west and south ends of the city (32 and 29 per cent of market share respectively), but the east end saw healthier than usual activity at 25 per cent, thanks in large part to the launch of Orléans Village by Caivan Communities. Capitalizing on pent-up demand, Caivan almost sold out of its initial release on opening weekend.
In the south end, townhomes proved popular, with the top five performing projects all offering town. While in the west, singles dominated.
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