Ottawa’s spring resale market more like fall thanks to COVID-19

Ottawa’s spring resale market looks more like a fall market because of the pandemic, according to the Ottawa Real Estate Board.

The board reported that its members sold 1,345 homes in May through the Multiple Listing Service (MLS). That was down 44 per cent compared to the same month last year. While the drop was less than April’s plunge of 55 per cent, the number of May sales was still wan compared to the five-year average of 2,048.

Vancouver and Calgary also saw a 44 per cent drop in May, while Toronto resales were down 54 per cent compared to the same month last year, according to real estate boards in those cities.

“Just as May’s temperatures had us questioning what season we were in, our real estate market also underwent a seasonal switch, so to speak,” said Ottawa board president Deborah Burgoyne. “This spring market is performing more like a fall market with the number of new listings and resales on par with what typically occurs in late October and November.”

Sales continue to droop but prices up again

May’s sales included 279 condos, a decrease of 49 per cent from May 2019, and 1,066 other homes, down 43 per cent from a year ago.

Coupled with a slow January, plummeting sales in April and May have dragged year-to-date numbers down by more than 24 per cent compared to the same period last year.

However, prices jumped in May, part of a continuing trend in the local market.

May’s average sale price for a condo was $343,589, an increase of 15.5 per cent from this time last year. Other properties averaged $548,140, up more than 11 per cent.

Ottawa may buck forecast trend

The price trend in Ottawa should hearten potential sellers worried by a recent Canada Mortgage and Housing Corporation forecast that resale prices in Canada could tumble by up to 18 per cent in the coming months.

“(CMHC’s) broad-based analysis for the country as a whole does not accurately reflect what is transpiring in our local market as evidenced by the steady increases in average home prices in Ottawa — even during the crux of a pandemic and global economic recession,” said Burgoyne. She pointed to Ottawa’s steady employment and continuous influx of newcomers as reasons prices continue to grow here.

Ottawa currently being a sellers’ market also pushes prices up, she noted. In May, condo inventory was down by over 53 per cent and other homes more than 49 per cent compared to last year.

Burgoyne is optimistic about the resale market going forward. She said there was a “restrained uptick” in sales in mid-May and she expects the market to follow suit as the economy continues to roll out, consumer confidence increases and the pre-COVID pent-up demand translates into sales.

“(W)ith cautious optimism, we can hope that there is a ‘flip flop’ and our fall numbers are closer to spring figures,” she said.

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