Ottawa’s resale housing market saw a dive in sales during June, with home sales plummeting 29 per cent from a year ago as the early-pandemic buying frenzy appears to fizzle.
Ottawa Real Estate Board (OREB) members sold 1,508 properties last month, down from 2,122 in June 2021. Home sales declined 31 per cent, while condo sales fell 23 per cent.
The average home sold for $772,861, six per cent more than a year ago, while the average condo price was $438,977, a more modest one per cent climb.
The change reflects a return to a more normal, seasonal resale market, caused by a glut in housing supply and rising interest rates that have kept buyers on the sidelines, said OREB president Penny Torontow.
“We’re going back to the traditional ways,” Torontow said Wednesday. “You have to remember, your house didn’t always sell in two days.
“It’s not a bad thing. Buyers can take their time. They don’t have to feel pressured. They don’t have to be up against 10 other offers,” she said.
“The sellers are the ones that are going to have to adjust. You may not get what your neighbour got for their house six months ago. But you’re still going to get a significant increase if you bought any time before the last two years.”
Historically, housing values have risen about two per cent a year over the past 50 years, she said. The sharp jump in prices over the past couple of years reflects the fact that the Ottawa market had been undervalued for years and years, she said.
“The prices had gotten to a point where they’d reached their peak for a while. There’s going to be some fluctuations, but people shouldn’t panic. I think things are going to level out.
“There are still lots of buyers out there. But there’s also a lot of buyer fatigue. They got fed up with putting in offers and losing. Now they’re saying, ‘Prices are coming down. I’m just going to wait a bit.’”
Significantly, Ottawa’s housing inventory has increased by 38 per cent from a year ago. That means, if no new houses were to go up for sale, it would take approximately 1.9 months for all existing homes on the market to sell, acco
rding to the real estate board.
The pandemic affected the housing market in many ways, but Torontow said the idea that investors from Toronto were snapping up Ottawa homes was a myth.
“I really feel that was exaggerated,” she said. “Even amongst ourselves (as realtors), we’d say, ‘I hope I get a buyer from Toronto. They’ll pay more.’ But really, that was a very small percentage of buyers. The same thing with foreign buyers. They became a bit of a scapegoat and were blamed for driving up prices, but nationally, foreign buyers make up less than two per cent of the market.”