The city’s tight housing supply is “not sustainable” if a more balanced market is to be achieved in the coming months, the head of the Ottawa Real Estate Board cautioned Friday as home prices rose 19 per cent in November compared with a year earlier.
The average residential-class home sold for $716,992 last month, up from just over $600,000 in November 2020, the board said. The average condo price, meanwhile, rose to $432,099 from about $361,000 a year earlier.
While noting that month-to-month price hikes have “tapered off slightly” – average residential prices last month were on par with October, while condo prices rose by seven per cent over the previous month – OREB president Debra Wright said the supply crunch that's driving up home costs is still a major concern for the industry.
“This is a far better situation than the monthly price escalations we had seen in the first quarter of 2021,” Wright said in a statement. “However, there is no question that supply constraints will continue to place upward pressure on prices until that is remedied.”
OREB said 1,430 new listings hit the market last month, down from 1,960 in October and 13 per cent below November 2020’s total.
Wright warned that the current one month’s supply of housing inventory “is much lower than it should be” to meet demand.
November sales down
“While still 30 or so units over the five-year listing average, this is simply not sustainable and is taking us further away from the balanced market that will bring much-needed relief to potential buyers,” she added.
OREB members sold 1,459 residential properties in November, down from 1,605 a year earlier.
But Wright argued that 2020’s figures were skewed because the sales peak shifted to later in the year due to the pandemic. She said this November’s sales were up 14 per cent compared with 2019, “a more relevant base year for comparison.”
Wright said last month’s figures should not be seen as a sign the market is softening, noting the number of properties that changed hands in November was still eight per cent higher than the five-year average of 1,348.
“And we also see an eight per cent increase in year-to-date sales over 2020, so it is fair to say that the resale market remains active and brisk,” she said.
Real estate firm Re/Max said earlier this week it expects the city’s stock of available housing to rise somewhat in 2022, prompting it to forecast smaller price increases in the coming months.