Market Trends

Headwinds & Buyer Opportunity

In our last market update, we talked about some significant current headwinds: rising interest rates, inflation, and macroeconomic factors such as the war in Ukraine. These are being felt.

The average residential class sale price in Ottawa fell from $853,615 in March, $829,318 in April and $802,393 in May. Condo class average sale prices have seen less dramatic declines, from $479,405 in March to $472,920 in May, likely buoyed by first time buyers turning to these properties after being priced out of the residential market. Similarly, unit sales numbers have dropped during the same period from 2,285 in March, 1,889 in April and 2,011 in May. At the same time, new listings have been growing from 2,632 in March to 3,120 in May which is a significant change for traditionally supply constrained Ottawa. For additional context, consider that March through May is historically the housing market’s strongest months.

Despite this cold does of reality, Ottawa is still very much a seller’s market, but softened towards a balanced market in the last quarter. To illustrate this point, the average complete days on market (CDOM) for listings has risen from 11 to 14 days from May 2021, whereas a balanced market sees CDOMs of 30-60 days. Additionally, inventory has risen to 1.2 months this month, which is welcome relief from extremely low levels at the beginning of the year, but still quite constrained. For sellers, this continues to be a good market.

So what about buyers? While the market remains competitive, it is not as competitive as it has been. Only 40% of residential class properties held offers in May, and more properties are being sold conditionally, providing an important opportunity for inspections and fulfillment of other conditions. As we head into the summer months, expect to see listings staying longer on the market and less buyers as Canadians turn their attention to vacation and fun outdoors. Now is a good time to buy.

OREB | Rina@oreb.ca