Ottawa’s new home market continued to be slow in May

Ottawa’s new home market is slowly coming back to life following the halt that was prompted by COVID-19 restrictions in mid-March, but sales continued to be much lower than usual in May.

There were 252 sales, down 58 per cent from the 609 sold in May 2019, according to the latest monthly report prepared by industry analyst PMA Brethour Realty Group for the Greater Ottawa Home Builders’ Association. The five-year average for May is 466.

But May results were up 26 per cent from April, which recorded a lowly 200 sales in the first full month of COVID-19 restrictions. April 2019 saw 622 sales — three times more than this year.


The increase in May from April “was expected and indicates that the market is coming back, but by no means in leaps and bounds,” says Cheryl Rice, who is president of PMA’s Ottawa office. “Slow and steady — that is what Ottawa’s market recovery is going to look like.”

A familiar pattern

The new home performance was similar to what the resale market saw in May, with the Ottawa Real Estate Board reporting a drop of 44 per cent from May 2019, although that was better than the 55-per-cent drop in April.

If we see consistent and incremental increases over the next few months, by fall new home sales could be at near-normal levels and possibly even better if the sales that were lost this spring occur later in the year, says Rice. “It’s a cautiously optimistic forecast, because, although demand is there and consumer confidence is growing, both will remain delicate for a period of time — for as long as the virus is still with us.”


Affordability continues to be an important factor, she notes, adding that there is variety in the types of housing being made available, including townhomes and condo apartments.

Small & frequent

“In the coming months, sales for these product types — in fact all product types — will largely depend on the frequency and size of releases. For as long as we must co-exist with COVID-19, it would be prudent for builders to keep their releases small and frequent, as they continuously gauge demand.”

More than half of new home sales in May were towns, at 54 per cent, versus 36 per cent for singles, four per cent for condo apartments and six per cent for condo towns.


And the south end captured the largest market share at 40 per cent, followed by 29 per cent for the west end and 27 per cent for the east. The most popular communities for sales were Half Moon Bay West, Pathways and Mahogany in the south end and Arcadia and Blackstone in the west end.

A developing trend?

Rice says a potentially new shift in buyer preference is on PMA’s radar.

“COVID-19 and the challenges that have come with physical distancing, self-isolation and quarantine, combined with the potential for a resurgence of the virus, may influence where buyers want to live and in what type of home,” she says. “Will they want more house and yard space? Will buying a new home outside of the confines of the city become more appealing to them? There is not enough current data to support a trend, but this is something on our watchlist.”


Almost all builders have now pivoted to a virtual sales process, she notes.

“For builders who have also re-opened their sites, some are offering a blended online/offline process, including online registrations, appointments, agreement signings, combined with in-person visits to select finishings and upgrades, tour model homes, and review and sign contracts… There are options for buyers depending on their comfort level.”

Still, the lion’s share of sales in May were concentrated among eight builders (up from the five builders who dominated in April). Minto Communities, which did well in April, repeated in May, claiming 27 per cent of the market.


“We continue to see demand for new homes in Ottawa,” says Minto’s Ottawa division president, Brent Strachan. “While we have physically reopened our sales offices and model homes, we are still finding purchasers preferring to take advantage of the virtual tours and virtual sales experience.”


Minto was joined by Mattamy Homes, Claridge Homes, Richcraft Homes, eQ Homes, Caivan Communities, Tamarack Homes and Cardel Homes in seeing higher activity.

“While several builders have had their virtual sales processes up and running for months now, others are now coming on stream. Every builder is in a different position,” says Rice. “For some it’s been business as usual, while for others the lockdown period was used to review and update their go-forward strategies…

“And although new releases are becoming more frequent and regular, it’s clear that most builders are doing so with caution. Full steam ahead has not been the overriding theme.”


About the Author

Anita Murray

Anita Murray

Anita Murray is the co-founder of All Things Home Inc. and owner of Three C Communications. The veteran journalist has covered the Ottawa housing industry since 2011.



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