While a new report is reinforcing how the COVID-19 pandemic appears to have little to no lasting impact on Ottawa’s blistering residential real estate market, a local realtor says there could be a bit of relief in sight for home-hunters who’ve been starved for choice in a tight market.
The aggregate price of a house in the capital rose 11.7 per cent to $527,290 in the second quarter of 2020 compared with a year earlier, Royal LePage said in its latest house price survey results released Thursday. That’s the fourth-highest increase in the country after three other Ontario cities, Mississauga, Windsor and Markham.
The median price of a two-storey home in Ottawa increased 10.6 per cent year-over-year to $552,429, while the median bungalow price jumped 14.4 per cent to $538,409. During the same period, the median price of a condominium rose 14.5 per cent to $370,425.
But Ottawa realtor Jason Ralph said there could be some light at the end of the tunnel for local home-shoppers.
“Buyers have returned more quickly to the market than sellers resulting in fewer listings, increased competition and double-digit price gains over last year,” Ralph, the managing partner of Royal LePage Team Realty, said in a statement.
“The good news is that the number of listings is starting to grow and buyers can expect to have more selection in the second half of the year. However, Ottawa is expected to remain a seller's market.”
Ralph said Ottawa is attractive for first-time buyers, particularly those from pricier markets as the Greater Toronto Area. He said some of the hottest destinations are at opposite ends of the location spectrum – for example, while the downtown core remains a hub of activity, towns within a reasonable driving distance of Ottawa such as Carp and Arnprior are also gaining in popularity.
Royal LePage is forecasting that the aggregate price of a home in Ottawa will rise four per cent year-over-year in the fourth quarter to $514,000.
The new study comes just days after the Ottawa Real Estate Board said home sales in the capital dropped just two per cent in June compared with a year earlier, while average home prices jumped more than 15 per cent.
Surging demand across Canada
Across the country, aggregate home prices rose 6.8 per cent to $673,072 compared with a year earlier, Royal LePage said.
While demand for housing has surged in many markets since real estate activity resumed following the COVID-19 lockdown, the company said inventory levels have failed to keep pace.
“Home prices shot up in the second quarter as a crush of buyers entered the market, attracted by extremely low interest rates and the perception of bargains to be had,” Phil Soper, president and CEO of Royal LePage, said in a statement. “Across Ontario and Quebec in particular, the demand for housing outpaced the growth in supply, especially in the early weeks post-lockdown.”
However, Soper said markets are starting to move closer to equilibrium.
“We are now seeing sellers return to the market in key supply-constrained regions in numbers sufficient to meet demand,” he said, adding “homebuyers should enjoy more reasonable conditions with stable prices and improved selection” in the second half of the year.
The company has revised its national forecast slightly upward, predicting the aggregate price of a home in Canada is expected to end 2020 up 2.3 per cent to $663,000 in the fourth quarter compared with the same period last year.