Average Ottawa home price drops $130,000 in one year

House for sale in Ottawa on Feb. 24, 2011. (THE CANADIAN PRESS IMAGES / Sean Kilpatrick)

The average cost of a new home in Ottawa has dropped by nearly $130,000 over the past year as rising interest rates slowed down the city’s real estate market.

New statistics from the Ottawa Real Estate Board shows the average sale price for a new home in Ottawa in February was $708,968, down 15 per cent from 2022. The average price of a new home in Ottawa was $837,517 in February 2022.

The 15 per cent decrease in home prices in Ottawa last month was the largest drop in monthly home prices over the last year.

A total of 855 residential properties were sold in Ottawa in February, down from 1,411 in February 2022. Home sales have declined in Ottawa for 12 consecutive months.

"We’re going to see declines in transactions and prices when we compare current figures to last February — the height of the pandemic resale market activity," OREB president Ken Dekker said.

"On the other hand, with the Bank of Canada holding interest rates steady, prospective buyers have more budget certainty to work with as we head into the spring market."

February's sales included 633 homes and 222 condominiums across Ottawa.

The average sale price for a condominium-class property was $410,927, down 12 per cent from a year ago. Condos sold for an average of $466,682 in February 2022.

The Ottawa Real Estate Board says despite the year-over-year decline in home prices, prices did increase 5 per cent over January.

"The average price increase for freeholds over January could be an indicator that buyers have normalized to the current interest rates. And perhaps, it’s a glimmer of more activity to come in the months ahead," Dekker said.

Dekker adds he was "pleasantly surprised" to see the real estate numbers for February.

"The market went down, really, the last half of 2022, so really we're not seeing a decrease in February – it already happened six-eight months ago," Dekker told CTV News Ottawa.

The Ottawa Real Estate Board says Ottawa is currently in a balanced market based on the number of months it takes to sell the inventory available.  Ottawa is at about 2.8 months of inventory, compared to 3.8 months of inventory at the end of January.

Dekker warns Ottawa could move into a sellers market if more homes don't come onto the market, "because there is still buyer demand". 

The real estate numbers come as economists predict the Bank of Canada will hold its key interest rate steady next week.

The central bank began its aggressive rate hike cycle one year ago, raising its key rate from near-zero to 4.5 per cent, the highest it's been since 2007.

$1 MILLION HOMES

According to the real estate website Redfin, 51 homes sold for more than $1 million in Ottawa last month.

The most expensive home was on Earlscourt Crescent in Manotick. Marilyn Wilson Dream Properties reported the home sold for $4.22 million.

Eight homes sold for more than $1 million in the first three days of March.

With files from The Canadian Press