A low supply of resale homes is benefitting the Ottawa new home market, which saw a boost in sales for March, according to a recent industry report.
Sufficient supply and strong new home sales are setting the stage for “a very promising spring buyer season,” the Ottawa president of PMA Brethour Realty Group, Cheryl Rice, says in a release.
According to a Greater Ottawa Home Builders’ Association monthly new home report, which is compiled by PMA, there were 475 new home sales in Ottawa in March, up 4.6 per cent compared to March 2017, which saw 454 sales. And sales in March were up a whopping 36 per cent over February, which dipped from January but still reached 348.
For the year to date, sales are up 5.2 per cent compared to last year (1,219 versus 1,159).
“While home sales dropped across the country, the Ottawa market is getting hotter and hotter,” says Rice. “Bidding wars – indicative of a seller’s market – have continued into the first quarter.”
She says buyers and investors from outside the city continue to flow into Ottawa for its affordability, strong economy and jobs, and predicts that moderate price increases and another interest rate increase are unlikely to impact current market conditions, especially before the fall.
“Measures implemented by the Bank of Canada and the provincial government to temper escalating prices in other major markets are working, and the pendulum will eventually swing their way again as those markets gain stability,” she says. But for the time being, “Ottawa is the best investment for buyers purchasing a new home.”
Last summer, the Bank of Canada began increasing its benchmark lending rate, which affects mortgage interest rates, while the province has introduced taxes on foreign buyers to cool Toronto’s overheated housing market. Along with that, the federal government introduced a new mortgage stress test in January to ensure buyers would be able to afford their mortgages if rates rose.
All of these measures have had an effect on the country’s hot markets, but the effect has been less so in the Ottawa new home market, where a steady and stable market has been less prone to react to the changing conditions.
The most popular regions in the Ottawa new home market in March continued to be the south and west ends, which combined for two-thirds of the market share. And in terms of housing type, townhomes continue to lead the market with a 47 per cent share, followed closely by singles at 40 per cent.
Among builders, Mattamy and Minto topped the list for sales – as they typically do – but were followed closely by Richcraft (continuing a strong run) and Tamarack.
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