The Ottawa resale market remains hamstrung by low inventory, according to the Ottawa Real Estate Board’s latest report.
The board says that members sold 2,032 residential properties in April through its Multiple Listing Service (MLS) System compared with 2,024 in the same month last year, an increase of just 0.4 per cent.
However, April sales were still ahead of the five-year average of 1,825, and prices continue to climb.
Multiple causes for resale slowdown
“The story hasn’t changed throughout this spring — our market is clearly suffering from low inventory, and we predict these conditions will persist until supply is restored,” said board president Dwight Delahunt in a statement.
Residential supply is down 18 per cent, and condo inventory is down almost 40 per cent from last April, according to the board.
Delahunt said the lag in new construction coming to market and the reluctance of potential sellers to put their homes up for sale because they are facing limited purchasing options are among the factors causing the resale slowdown.
“Add to this a stress test for buyers that can limit purchasing capacity in a market where prices are accelerating and it becomes a ‘Catch 22’ situation for the foreseeable future,” said Delahunt.
Prices and competition still accelerating
The average sale price of a non-condo property sold in April in the Ottawa area was $488,729, an increase of 7.4 per cent over April 2018. The average sale price for a condominium was $307,659, a rise of 14.3 per cent from the same month last year. Year-to-date non-condo prices have grown 6.6 per cent, while condos have surged ahead 8.7 per cent.
Market conditions mean many multiple offer situations, according to Delahunt. He said about one-third of properties are selling for more than the asking price, although he also noted that more than half are selling below the listed price.
Delahunt said this also bodes well for the condo market. For a long time, it had been plagued by excess inventory, but that situation is changing as buyers snap up units and prices rise as supply shrinks.