An early spring could be on the horizon for the local housing sector if the February 2022 resale market is any indication, according to the Ottawa Real Estate Board.
While the month saw only a small year-over year increase in total transactions through the board’s Multiple Listing Service (MLS) — 1,421 compared to 1,386 the same month last year — February’s transaction were 52 per cent higher than the 936 recorded in January of this year.
“While a month-to-month increase is typical for this time of year, the gradation of this increase is higher than previous years, which could be an indication that our spring market may ramp up earlier this year,” said board president Penny Torontow in a statement.
In the February 2022 resale market, 1,095 non-condo properties and 326 condos changed hands. Those numbers were up seven per cent and down 10 per cent, respectively.
Interest and inflation rates spark buying
Everything from the easing of government pandemic restrictions to concern over possible interest rate increases, a concern that bore fruit when the Bank of Canada raised the key interest rate earlier this week, may have impelled buyers to jump into the market early, said Torontow.
“We are watching intently to see how the 2022 spring market will play out considering not only the higher interest rates and inflation but also other macro factors in our global environment that could affect our local economy.”
She added that higher interest and inflation rates will weaken buyers’ purchasing power.
Prices still rising amid a glimmer of hope
Non-condo properties sold for an average $837,517 in February, up 17 per cent from a year ago and the first time average prices have crossed the $800,000 line. Condos went for 15 per cent more at an average $466,682.
“Even though average price growths are not as acute as they were in the past two years, we are still seeing significant increases that are without question a result of the unrelenting high demand and current housing stock scarcity,” said Torontow.
Thanks to new listings – which was also seen in other Canadian markets last month – and despite a steep drop in condo availability, overall housing inventory grew 10 per cent compared to the same month last year. That offers a “slight glimmer of hope,” said Torontow. At the same time, she said homes are still being snapped up quickly and Ottawa remains a seller’s market.