A surge in the sale of high-end homes helped create Ottawa’s resale price spike in January, according to the Ottawa Real Estate Board.
Realtors with the board sold 63 homes at over $1 million last month compared to just 16 in the same month last year. That anomaly helped boost the average non-condo price to $677,197, a whopping 31 per cent jump over a year ago.
Condo prices increased at a more modest 13 per cent in January, to an average $380,336.
“I would like to caution those looking at the increase in average prices this month and believing that property values are accelerating at an extreme pace,” said board president Debra Wright in a statement. “Sustained price movements are better reflected during the mid to latter part of the year, where trends begin to emerge, and comparisons can be drawn.”
Sales brisk in January
Spurred on by what Wright characterized as “pent-up buyer demand,” sales also ratcheted up last month. Realtors with the board sold 964 residential properties through the Multiple Listing Service (MLS) system. That compared with 778 in January 2020, an increase of 24 per cent. It was also far above the five-year average for the month of 786.
January’s sales comprised 674 non-condo properties and 290 condos.
Last month’s sales surge occurred even as the mid-month lockdown further restricted supply, said Wright. “Earlier in the month, listing activity increased, likely driven by those sellers waiting until after the holiday season to put their properties on the market. However, once the stay-at-home order was announced, sellers pulled back (rightfully so) and the number of properties entering the market declined.”
Wright added that Ottawa would have seen even higher resale numbers in January if the inventory hadn’t been so tight. Restricted supply has been a long-running problem in Ottawa, with available properties last month down over 40 per cent compared to the same month last year.
Long-term effects of the lockdown uncertain
While sales in January were brisk, the number of properties that changed hands was down from over 1,000 the previous month. Wright points to the lockdown as partially responsible for that.
The effects of this latest lockdown won’t be known for several months, she said, and will be influenced by when the current stay-at-home order is lifted.
At the same time, she pointed to the remarkable resilience of the market in 2020, which rapidly recovered from the first lockdown last March and went on to set a new record for both units sold and prices.