'Chronic supply issues': Real estate agents issue warning as Ottawa home sales jump 11 per cent in September

A new home is displayed for sale in a new housing development in Ottawa on Tuesday, July 14, 2020. Prospective buyers have lamented the torrid pace Canada's real estate market has moved at in recent years, but many feel 2023 may be the year their luck changes. THE CANADIAN PRESS/Sean Kilpatrick

Ottawa's real estate market saw an 11 per cent boost in sales in September as interest rates continued to fall, but real estate agents warn "chronic supply issues" are hurting the market.

The Ottawa Real Estate Board says 1,047 homes were sold in September, up from 946 homes sold in September 2023. Statistics show the benchmark price for homes sold in Ottawa was $642,800 in September, up 0.2 per cent from the year before.  

"As we navigate a shifting housing market, Ottawa’s fall outlook is healthy,” Curtis Fillier, OREB president, said in a statement.

“Activity is robust with an uptick in sales and prices remaining steady. Meanwhile, both buyers and sellers are rethinking their purchasing power amidst news about additional interest rate cuts on the horizon, longer amortizations, and increased price caps for insured mortgages.” 

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A total of 10,485 homes were sold in Ottawa in the first nine months of 2024, up from 9,852 homes sold in the January-September period in 2023.

The Bank of Canada cut its key interest rate for the third consecutive time in September, with the rate dropping 25 basis points to 4.25 per cent. Governor Tiff Macklem said if the economy continues to improve, more rate cuts should be expected later this year.

Fillier says while conditions are improving for people to buy homes, a lack of development will slow down the real estate market.

"Ottawa’s market does not typically have demand problems — we have chronic supply issues," Fillier said.

"We’re not building enough homes in the city, and we’re not building enough of the right homes to address the ‘missing middle.'"

A report for the City of Ottawa's planning committee in September showed housing construction starts were only at 22 per cent of the target through the first six months of the year. Construction started on 2,774 new homes in the January to June period.

The Ottawa Real Estate Board says the number of new listings available in Ottawa increased 3.9 per cent last month compared to September 2023. There were 2,343 new residential listings in September 2024.

As of the end of September, there were 3,529 active listings on the market.

Average home prices in September in Ottawa

• Overall MLS composite benchmark price: $642,900
• Benchmark price for a single-family home was $729,000 (up 0.5 per cent from September 2023)
• Benchmark price for a townhouse was $500,000 (down 1.7 per cent from September 2023)
• Benchmark condo price was $414,200 (down 1.3 per cent from a year ago)

(Source: Ottawa Real Estate Board)