A continued lack of supply created a slight dip in the April 2021 new-home market, according to industry analyst PMA Brethour Realty Group.
April new-home sales hit 500, PMA says in its latest monthly report prepared for the Greater Ottawa Home Builders’ Association. That was up a whopping 152 per cent over April last year, but the jump is deceiving.
April 2020 was the first full month of the pandemic lockdown, when the economy screeched to a halt, the world went into lockdown and businesses had to figure out how to pivot. As a result, April 2020 sales were a paltry 198, well off the five-year average of 451.
A better comparable is last month. At a time when the spring market would normally be ramping up, sales this April were lower than March, which recorded 507 sales.
‘Not keeping up with demand’
“April sales dipped slightly from the previous month, mainly due to new-home supply, which has not been keeping up with demand,” says PMA Ottawa president Cheryl Rice.
But she also notes that this April saw sales that were 10 per cent higher than the five-year average. And for the year to date, sales are up 11 per cent (2,009 this year versus 1,799 last year), which is also above the five-year-average.
The south end of the city, in particular, saw a lot of activity, capturing more than 50 per cent of the market share, which is unusual. Typically, sales in the south and west end are fairly balanced, with slightly less in the east end and a smaller portion centrally.
But in April, the south end claimed 57 per cent of market share, the west and east ends each had 15 per cent and the central region recorded 13 per cent.
“Ottawa South benefits from a high density of new-home communities within a much larger ‘sample net’ or geography that includes Richmond, Riverside South/Leitrim, Manotick and others,” Rice explains. “Although some of these markets are smaller, such as Richmond, large builders in those areas are generating consistent sales.”
Leading the market
One of those large builders generating consistent sales, both in the south end and at other sites across the city, is Claridge Homes, which is currently leading builders for market share this year.
“While many low-rise builders are pacing their sales to manage costs and closing dates, Claridge typically releases a new phase of products all at once,” Rice notes. “The builder also benefits from having a significant number of condo projects to supplement their sales.”
Joining Claridge at the top of the market share list are perennial frontrunners Minto Communities and Mattamy Homes, both of whom are quite active in the south end.
The new-home market continues to be plagued by projects that are temporarily sold out, “which has had buyers clamouring for an appointment to purchase a new home as soon as product becomes available,” Rice says. “High demand, rising prices, and tight supply are expected to continue to at least the end of 2021.”