Home sales fell to their lowest pace in more than a decade last month, plummeting nearly 30 per cent year-over-year in the face of rising mortgage rates and soaring inflation, the Ottawa Real Estate Board said Wednesday.
OREB members sold a total of 1,508 residential properties in June, down 29 percent from the same month a year ago and well below the five-year average of 1,966.
Meanwhile, resale home prices barely nudged last month following a run of sustained double-digit hikes. Residential-class properties sold for an average of $772,861 in June, up six percent from the previous year, while the average condo changed hands for $438,977 – an increase of just one percent from June 2021.
“After the frenzy of the past two years, we are witnessing Ottawa’s resale market normalize in 2022 and shift towards the more traditional seasonal ebb and flow cycle,” OREB president Penny Torontow said in a statement.
While Torontow attributed much of the sales dip to rising interest rates that make the price of borrowing for a home more expensive as well as surging inflation that’s straining homebuyers’ pocketbooks, she also cited other potential mitigating factors.
She said “buyer fatigue combined with a wait-and-see approach towards home prices” and a lack of consumer confidence could be dampening demand for homes. Toronto said “the uncertainty surrounding back-to-work arrangements” could also be playing a part, noting “a long commute with rocketing gas prices will certainly affect decisions about where to live.”
She added that while price increases have leveled off over the past couple of months in the region as a whole, that doesn’t mean all neighborhoods are likely to experience the same levels of moderation.
“While our average price statistics provide an overall picture, as the market settles, there will be adjustment differences in various pockets of the city,” Torontow said. “For example, what happens in Westboro will not likely mirror Findlay Creek.”
Meanwhile, the city added more than 3,200 new residential-class listings to its inventory in June, boosting the stock of available resale homes by 37 percent over last year. Ottawa’s resale condo supply rose 14 per cent year-over-year.
“There is more selection, fewer bidding wars, and less pressure (for buyers) to make a warp-speed decision,” Torontow said.