February Ottawa new-home sales took a tumble, but the drop was not due to a lack of demand.
Sales in February were 475, down 27.8 per cent over February 2020 (658 sales) and down 8.3 per cent from January (518 sales), according to the latest monthly report prepared for the Greater Ottawa Home Builders’ Association by industry analyst PMA Brethour Realty Group.
“While February new-home sales were lower than the previous month, as well as pre-pandemic February 2020, lower sales volumes were not due to a down-shift in demand,” says PMA’s Ottawa president, Cheryl Rice. “It was the complete opposite, underlining the ongoing cost and scheduling challenges faced by Ottawa new-home builders to keep up with demand.”
For the year to date, sales hit 993, down 12 per cent compared to last year when sales were at 1,129. February 2020 was an unusually brisk month for new-home buying, seeing double the sales of the previous three years. The five-year average for February is 441.
FOMO is the main driver
When it came to this February, “product released was product sold — immediately,” Rice says. “There’s been some buyer hesitation on price, but many of them have been on the market for so long that FOMO (fear of missing out) has become the main driver of our current market.
“High demand combined with low inventory is a recipe for higher prices, and because buyers understand this, they’re feeling a growing sense of urgency.”
Several builder sites are chronically temporarily sold out, with frequent micro lot releases that are snapped up as soon as they are available.
February sales were evenly split between singles and townhomes — at 40 and 42 per cent, respectively. And the south end of the city captured half the market share, as it also did in January.
Claridge Homes had a particularly strong month, claiming 22 per cent of the market, thanks to readily available lots on hand to sell, Rice says.
She sees March sales continuing in a similar pattern.