Ottawa’s housing supply shortage creating ‘upward pressure’ on prices, OREB says

The Ottawa real estate market remained buoyant in the face of plummeting temperatures in November, and prices rose 19 percent.

However, the Ottawa Real Estate Board warns that the current housing stock is “much lower than it should be” to meet demand, which is driving up prices for Ottawa buyers.

“This is simply unsustainable and takes us further from the balanced market that will bring much-needed relief to potential buyers,” said President Debra Wright, adding that there were fewer new homes available in the market last month.

A total of 1,459 homes were sold in Ottawa in November, compared to 1,605 homes in November 2020.

“Although resale transactions in November were down year over year, it is because peak market activity in 2020 has been postponed until later in the year due to the initial pandemic lockdown,” Wright said in a statement. “In reality, sales in November were 14 percent higher than in 2019 (1,284), a more relevant base year by comparison.”

The Ottawa Real Estate Board says sales in 2021 were up eight percent compared to 2020.

“So the resale market remains active and vibrant,” said Wright.

According to the Ottawa Real Estate Board, 1,430 new listings were launched last month, 27 percent fewer than the 1,960 new listings in October. The 1,430 new entries in November are 13 percent lower than in November 2020.

“While the drop in new entry volume is typical of November, with a month’s supply our inventory is much lower than it should be,” Wright said.

The average price of a residential property in Ottawa was $ 716,992 in November, up 19 percent from the previous year ($ 603,146). The average price of a condo sold was $ 432,099, up 19 percent from 2020 ($ 361,800).

The average 2021 sales price for a new home in Ottawa rose 24 percent to $ 719,956 in 2021. The Ottawa Real Estate Board says the month-to-month price accelerations have “subsided slightly,” with average prices in November level with October levels.

“This is a far better situation than the monthly price increases we saw in the first quarter of 2021,” Wright said.

“However, there is no question that supply bottlenecks will continue to put pressure on prices until this is resolved.”

SUPPLY QUESTIONS IN OTTAWA

The city of Ottawa reports 9,239 housing starts in 2020, the highest number of housing starts in the capital since the merger in 2001.

Kevin Grimes of Remax Affiliates Realty announced to Newstalk 580 CFRAs Ottawa Now that the offer will continue to be challenging for Ottawa’s housing market.

“It is nowhere near enough,” said Grimes. “When you keep hearing the supply issue and Ottawa’s population grew by over 16,000 in the same year. So 16,000 people came to the city and we started 9,200 new buildings – that’s just not enough. “

Grimes says Ottawa will need to start building new homes to meet demand.

“After all, we’re not building enough houses right now.”

A new Remax report this week estimates house prices in Ottawa will rise five percent in 2022.

“In short, I’d say our lack of supply,” said Grimes when asked what is likely to drive the rise in home prices in 2022.

“We definitely have a supply problem in Ottawa, we’ve had it for a while, but it just seems to be getting worse.”