The July 2022 resale market in Ottawa experienced a “profound slowdown,” according to the latest numbers from the Ottawa Real Estate Board. July marked the fifth month in a row the market saw a drop in sales after more than two years of frenzied activity.
Realtors sold just 1,100 homes last month, down 35 per cent from July of last year. Sales last month were also far below the five-year average of 1,691 homes.
July sales comprised 840 non-condominium properties and 270 condos.
“We are witnessing a profound slowdown in Ottawa’s resale market,” said board president Penny Torontow in a statement. “July’s numbers reveal that buyers are indeed putting on the brakes more heavily than what is typically expected during the mid-summer sales dip.”
She attributed the slowdown in the July 2022 resale market to rising interest rates, inflation, buyer fatigue and a wait-and-see approach as price increases moderate.
July saw continuing sales declines in some other Canadian cities, including Vancouver, Calgary and Toronto.
MORE: Ottawa resales tumble in June
Inventory up & price increases moderate
With sales numbers tumbling and new listings rising, Ottawa now has an inventory of almost three months for non-condo properties and 2.5 months for condominiums. That’s edging toward the four-month supply that is considered a balanced stock of homes in the local resale market and a significant increase following several years of low inventory.
In July, non-condo properties sold for an average $716,354, up five per cent from last July. Condos sold for $425,694, an increase of just one per cent. Year-to-date, non-condos have sold for an average $805,238 and condos for $461,557.
“The double-digit average price increases that we saw in the past couple of years right up until the early spring have now morphed into single-digit increases, which aligns more with our traditional stable year-over-year price growth,” said Torontow.
She also called for the federal government to reassess and adapt the mortgage stress test.
“It was originally designed when rates were very low to ensure buyers could manage rate hikes. With interest rates where they are now, they have to qualify at a seven- to eight-per-cent rate, which no longer makes sense and takes many buyers out of the market.”