Ottawa home sales down 27 per cent in August amid interest rate hikes

Home sales in Ottawa decreased sharply again in August as higher interest rates continued to cool the real estate market.

The number of homes sold in August was down 27 per cent year-over-year, the Ottawa Real Estate Board reported Tuesday.

“The lightning speed at which homes were selling at the start of 2022 is a thing of the past,” OREB President Penny Torontow said in a news release, pinning the slowdown on buyer uncertainty due to higher interest rates.

“Buyers are uncertain about their purchasing power given impending additional interest rate hikes,” Torontow said.

The Bank of Canada hiked its key rate by a full percentage point in July, the largest such increase in 24 years. That followed a series of hikes that began in March.

The year-over-year average price of a home in Ottawa went up five per cent, to just under $708,000. However, it’s down from the previous month, which saw an average price of more than $716,000.

“What happened to prices in 2020 and 2021 was unusual,” Torontow said. “We are moving towards a balanced market state, where buyers have choices and sellers need to ensure they are pricing their properties accurately.”

Home sales in Ottawa decreased 35 per cent in July and 29 per cent in June.

The cooler market also means a return to standard financing and inspection conditions and fewer scenarios involving multiple offers, she said.

And the market is seeing closer-to-normal inventory, with an inventory of nearly three months for residential properties. The inventory in early 2022, when the market was red hot, was about two weeks.

Condominium properties saw a 28 per cent decrease in sales in August. The average condo price was nearly $422,000, up four per cent from the previous year but down slightly from July.