Ottawa's Real Estate Market: A Look into August's Performance and Persistent Supply Challenges

The Ottawa Real Estate Board (OREB) released its August market report, which sheds light on the current dynamics of the city's housing market. Despite the challenges the market is facing, there are some positive trends and opportunities for both sellers and buyers.

August Performance: An Overview

According to the OREB, 1,196 residential properties were sold in August through the Board’s Multiple Listing Service® (MLS®) System, marking a 6% increase from August 2022. The sales comprised 903 freehold properties (up 7% from last year) and 293 condominiums (a 2% increase from August 2022).

"Housing sales activity in August was up slightly compared to the previous year but still significantly below the historical average for this time of year," says Ken Dekker, OREB President.

Price Trends: A Closer Look

The average sale price for a freehold property in August was $709,739, reflecting a slight growth of 0.5% from 2022, but a 5.6% decrease compared to July 2023. Similarly, the average sale price for a condominium-class property was $425,968, marking a 1% increase from a year ago, but 1.4% lower than July 2023.

Interestingly, the year-to-date average sale prices have shown a downward trend, with freehold properties and condominiums experiencing an 8% and 5.5% decrease respectively compared to 2022.

New Listings and Inventory: The Supply Challenge

The OREB reported 2,228 new listings in August, which is a 7% increase from August 2022 and on par with the previous month. This figure is in line with the 5-year average for new listings in August, which stands at 2,177.

However, the supply challenge persists. The months of inventory for freehold properties have increased to 3 months from 2.9 months in August 2022 and 2.7 months in July 2023. For condominium-class properties, the months of inventory remain the same as August 2022 at 2.2 months, a slight decrease from 2.3 months in July 2023.

Addressing Affordability and Supply Challenges

Janice Myers, OREB CEO, points out that the supply challenge coincides with the City of Ottawa's allocation of $110 million for affordable housing. However, Myers warns that even with a potential drop in interest rates and economic stability, housing will still be out of reach for many Ottawa residents without significant changes.

"Collaboration among all levels of government and stakeholders is crucial to improving affordability for homeowners and tenants alike. We need to expand provincial regulations to promote higher-density housing," Myers explains.

The Role of REALTORS®

In addition to assisting with property sales, OREB REALTORS® also aid in finding rentals and vetting potential tenants. Since the beginning of the year, they have helped clients rent 4,571 properties, a 10% increase from the same period last year.

Understanding the Market: A Final Word

While the average sale price can indicate trends over time, it's important to note that they should not be used as indicators of specific property value changes. Prices can vary significantly from neighbourhood to neighbourhood.

The OREB continues to be a valuable resource for understanding the Ottawa real estate market. It is Ottawa’s largest trade association with over 3,900 Sales Representatives and Brokers in the area, all committed to assisting clients in navigating the complexities of the real estate market.

Whether you're a buyer or a seller, staying informed about the market trends and challenges can help you make more informed decisions. The real estate market continues to evolve, and understanding these changes is key to successful real estate transactions.