A “subdued” housing market in Ottawa could get a jumpstart if Canadians go to the polls this fall for a federal election, according to one report released today.
The Royal LePage House Price Survey released Thursday showed that the aggregate price of a home in Ottawa increased 1.6 per cent year over year to $775,100 in the third quarter of 2024. On a quarterly basis, the aggregate price of a home in the region remained virtually unchanged, decreasing 0.3 per cent.
Broken out by housing type, the median price of a single-family detached home increased 1.8 per cent year over year to $894,400 in the third quarter, while the median price of a condominium increased modestly by 1.0 per cent to $400,300 during the same period.
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“At the end of the summer, the Ottawa real estate market had approximately three months worth of inventory, teetering between a balanced and a seller’s market. Properties tend to stay online for a little over a month these days, which signals a healthy marketplace for both buyers and sellers,” said Jason Ralph, broker of record and president, Royal LePage Team Realty.
“Home prices have continued to hold steady in recent months as sellers stick with their listing strategy; they remain confident that they will secure the price they want, even if they have to wait. Buyers are still hunting for a bargain, and are comfortable taking their time to find the property that best suits their needs. Those who are under a time constraint are moving because they have to – many others continue to wait until borrowing rates become more affordable.”
Ralph noted that new mortgage legislation is generating some buzz in the market, making first-time buyers more optimistic. Busy open houses and an increase in showing requests proves consumers’ confidence in the trajectory of the market is improving, he added.
“We expect home prices to trend upward slightly throughout the rest of the year as new borrowing rules improve affordability for first-time buyers,” said Ralph. “Rising prices could be exacerbated if an election is called this year. Whenever there is a changeover in government, the Ottawa housing market tends to react more markedly than other major cities.”
Royal LePage is forecasting that the aggregate price of a home in Ottawa will increase 4.5 per cent in the fourth quarter of 2024, compared to the same quarter last year.
Nationally, the report showed that the aggregate price of a home in Canada increased 1.6 per cent year over year to $815,500 in the third quarter of 2024. On a quarter-over-quarter basis, however, the national aggregate home price decreased 1.1 per cent, following sluggish activity in some markets through the summer. Coast to coast, sales volumes began to pick up in September, and more than one-third (38 per cent) of regional markets covered in the report recorded positive aggregate price gains in the third quarter over the previous quarter.
“Despite three cuts to the Bank of Canada’s overnight lending rate, buyer demand nationally remains weak, particularly among two key groups: first-time homebuyers and small investors,” said Phil Soper, president and chief executive officer, Royal LePage.
The Ottawa Real Estate Board reported earlier this month that home sales in the city were “healthy” amid a shifting market and ongoing lack of supply.
The number of homes sold totalled 1,047 units in September 2024, an 11.4-per-cent increase from September 2023, OREB said in a news release. Home sales were 17.4 per cent below the five-year average and 15.4 per cent below the 10-year average for the month of September.
On a year-to-date basis, home sales totalled 10,485 units in September 2024, an increase of 6.4 per cent from the same period in 2023.
“As we navigate a shifting housing market, Ottawa’s fall outlook is healthy,” said OREB president Curtis Fillier. “Activity is robust with an uptick in sales and prices remaining steady. Meanwhile, both buyers and sellers are rethinking their purchasing power amidst news about additional interest rate cuts on the horizon, longer amortizations, and increased price caps for insured mortgages.
“There have been encouraging policy developments recently that will stimulate demand,” added Fillier. “But Ottawa’s market does not typically have demand problems — we have chronic supply issues. We’re not building enough homes in the city, and we’re not building enough of the right homes to address the ‘missing middle.’”
According to OREB, the overall composite benchmark price was $642,800 in September 2024, an increase of 0.2 per cent from September 2023. The average price of homes sold in September 2024 was $685,551, increasing 1.4 per cent from September 2023. The more comprehensive year-to-date average price was $679,082, increasing by 0.9 per cent from September 2023.
