The August 2022 resale market saw a 27-per-cent drop in sales transactions compared to a year ago. That marks the sixth month in a row the market has declined and another sign that the local housing industry is feeling the pinch of rising interest rates, inflation and affordability problems.
The Ottawa Real Estate Board reports that Realtors sold 1,137 residential properties in August through the board’s Multiple Listing Service (MLS), down from 1,565 in the same month last year. August’s sales included 850 non-condo properties and 287 condominiums, in both cases up marginally from July resale numbers. The five-year average for total sales in August is 1,603.
While summer vacations means August is traditionally a slower month, “buyers are uncertain about their purchasing power given impending additional interest rate hikes,” said board president Penny Torontow in a statement.
“The lightning speed at which homes were selling at the start of 2022 is a thing of the past, evidenced by days on market inching closer to that 30-day mark. We have also observed a return to standard financing and inspection conditions and fewer multiple offer scenarios.”
Ottawa’s new-home market has seen a similar slowdown in recent months, with July setting a new record for low sales.
Prices and inventory continue to rise
In August, non-condo resale homes sold for an average $707,712 and condos for $421,966. Those prices are five and four per cent higher, respectively, than the same month in 2021.
Year to date, non-condo properties are averaging $795,978 and condominiums are $457,771. While those prices are 10 and nine per cent higher compared to the same period in 2021, the runaway price growth that the Ottawa resale market saw, especially during the pandemic, has slowed dramatically.
“Prices are still rising slightly in some areas, albeit lower single-digit percentage increases, bringing back the moderate price-growth stability that is characteristic of the Ottawa resale market,” said Torontow. “What happened to prices in 2020 and 2021 was unusual. We are moving towards a balanced market state, where buyers have choices and sellers need to ensure they are pricing their properties accurately.”
Inventory also rose again last month, with 2,093 properties listed in August, boosting inventory to nearly three months for non-condo properties and 2.2 months for condominiums. Both numbers are considerably higher than the low supply that had dogged the local market since before the pandemic began.