Home sales in Ottawa plummeted more than 60 per cent in the first two weeks of April compared with a year earlier, the city’s real estate board said Tuesday, the same day a report from Royal LePage predicted house prices in the capital will remain stagnant for the rest of 2020 as fallout from the COVID-19 pandemic wreaks havoc with the economy.
A total of 354 residential properties changed hands from April 1-14, the Ottawa Real Estate Board said, down from 898 in the same period in 2019. Sales in the residential class fell 61 per cent from 700 to 270, while condo sales dropped from 198 to 84, a decline of 58 per cent.
The numbers illustrate just how hard the COVID-19 crisis has hit the real estate industry.
Physical distancing measures imposed to combat the spread of the deadly virus have led many agencies to curtail marketing efforts such as open houses until the pandemic abates. Meanwhile, growing economic uncertainty and mounting job losses threaten to throw cold water on a market that was still red hot as recently as early March.
Before the pandemic, monthly unit sales were increasing between 10 and 16 per cent compared with 2019, but sales in March were just on par with a year ago.
Although sales were down in the first two weeks of April, home prices continued to hold steady. The average price of a residential property dipped slightly this year compared with 2019, from about $505,000 to $496,000, while the average condo price jumped to nearly $340,000 in the first two weeks of this month, up from $304,000 a year ago.
But a new report from one of Canada’s largest real estate firms says any gains aren’t likely to continue much longer.
Royal LePage said Tuesday it expects the Ottawa market to see only modest price gains at best for the rest of 2020 as the country struggles to deal with the pandemic and its effects.
The real estate giant predicts that if the economy begins to rebound by the end of the second quarter, Ottawa could see a slight year-over-year gain of 2.5 per cent in aggregate home prices to $506,500. But if things don’t start to improve until later in the summer, Royal LePage said, it’s forecasting the aggregate price to dip to about $494,000.
OREB president Deborah Burgoyne, a sales representative at Royal LePage Team Realty, said she's hoping pent-up demand will fuel a resurgence in the housing market later in the year.
"How the market unfolds in the upcoming months may very well be impacted by other external factors outside of our control," she said in a statement. "Certainly, there are buyers and sellers who may be taking a wait-and-see approach and will eventually enter the market, albeit at a later date, leading to a surge later on in 2020 when things would typically slow down."
Fellow Royal LePage realtor John Rogan said he expects prices to remain fairly consistent throughout 2020.
“There are many unknowns about the long-term economic impact of COVID-19 on real estate,” Rogan, a broker at Royal LePage Performance Realty, said in a statement. “However, low inventory is supportive of home price appreciation, or at least home price stability. While we are not expecting to see (2019-level) price gains this year, at this stage it's not likely that prices will notably decline either.”