Ottawa's housing supply shortage creating 'upward pressure' on prices, OREB says
Ottawa's real estate market remained brisk as the temperatures dropped in November, with prices increasing 19 per cent.
However, the Ottawa Real Estate Board warns the current housing inventory is "much lower than it should be" to meet demand, driving up prices for buyers in Ottawa.
"This is simply not sustainable and is taking us further away from the balanced market that will bring much-needed relief to potential Buyers," said President Debra Wright, adding fewer new homes became available on the market last month.
A total of 1,459 residential properties were sold in Ottawa in November, compared to 1,605 properties in November 2020.
"Although the resale transactions in November were down compared to a year ago, this is because 2020’s peak market activity shifted to later in the year due to the initial pandemic lockdown," said Wright in a statement. "In reality, November’s unit sales tracked 14 per cent higher than 2019 (1,284), a more relevant base year for comparison."
The Ottawa Real Estate Board says there has been an eight per cent increase in year-to-date sales in 2021 compared to 2020.
"So it is fair to say that the resale market remains active and brisk," said Wright.
The Ottawa Real Estate Board says 1,430 new listings entered the market last month, down 27 per cent from the 1,960 new listings in October. The 1,430 new listings in November is 13 per cent lower than November 2020.
"While the drop in volume of new listings is typical for November, our inventory, at one month’s supply, is much lower than it should be," said Wright.
The average price for a residential-class property in Ottawa in November was $716,992, up 19 per cent from a year ago ($603,146). The average price for a condominium sold was $432,099, up 19 per cent from 2020 ($361,800).
Year-to-date average sale prices for a new home are up 24 per cent in Ottawa in 2021 to $719,956. The Ottawa Real Estate Board says the month-to-month price "accelerations have tapered off slightly," with average prices in November on par with October.
"This is a far better situation than the monthly price escalations we had seen in the first quarter of 2021," said Wright.
"However, there is no question that supply constraints will continue to place upward pressure on prices until that is remedied."
SUPPLY ISSUES IN OTTAWA
The city of Ottawa reports 9,239 new housing starts in 2020, the highest number of new housing constructions starting in the capital since amalgamation in 2001.
Kevin Grimes of Remax Affiliates Realty tells Newstalk 580 CFRA's Ottawa Now that supply will continue to pose a challenge for Ottawa's housing market.
"It's nowhere close to enough," said Grimes. "If you hear the supply issue constantly and Ottawa's population grew in the same year by over 16,000 people. So 16,000 people came into the city and we started 9,200 new construction – it's just not enough."
Grimes says Ottawa needs to start building new homes to meet the demand.
"Ultimately, we're not building enough houses right now."
A new Remax report this week estimates home prices will rise five per cent in Ottawa in 2022.
"In a word, I would say our lack of supply," said Grimes when asked about what is expected to drive the increase in home prices in 2022.
"We definitely have a supply issue in Ottawa, we've had it for some time but it just seems to be compounding right now."