Several factors have come together to affect the June 2021 new-home market in Ottawa, which has seen sales stall compared to last year and last month.
In the latest Ottawa new-home market report prepared by PMA Brethour Realty Group for the Greater Ottawa Home Builders’ Association, sales were a meager 283, which is down 54 per cent from June 2020 (625 sales) and down 29 per cent from this May (402 sales).
While last year’s unusual pandemic-influenced buying pattern skews the numbers, this June’s sales are also almost 50 per cent below the five-year average of 527 sales.
PMA Ottawa president Cheryl Rice says the June result is due to multiple factors.
“New-home product continues to be released but demand has started to slow,” she notes. “Buyer fatigue, brought on by a year of tight supply and higher prices that have pushed many buyers out of the market, is one factor.
“Another is that the fear-of-missing-out mentality that set new-home sales on fire is no longer a key motivational factor. Buyers who lined up to purchase a home with more space following the post-March 2020 lockdown have by now made their purchase.”
The summer season is traditionally a slower period for housing sales, she points out, and when combined with the current letting up of COVID restrictions, “people are eager to get back to a sense of normal where family, friends, social interaction, travel, etc., are the priority. People are in no rush to buy a new home.”
Even though the year-to-date numbers for 2021 are on par with last year (2,694 to the end of June this year versus 2,674 last year), Rice says she’s seen evidence over the last few months of both demand and new-home sales starting to slow down.
“PMA’s data for monthly available inventory of newly released product showed that new product was not being absorbed as quickly as it had previously,” she says. At the same time, while new-home prices continue to increase, they do so “with less frequency and in smaller increments; another indication that the market is changing.”
The resale market is also showing a continued move to a more balanced market, she notes. “Sales are good, prices continue to rise and multiple offers are still being presented, only fewer… The Ottawa market is catching its breath.”