Tight rental market buoying condo sales, realtors say

Condo construction

Thanks to a surging condo market, local realtors enjoyed their best August in at least a decade, the latest figures from the Ottawa Real Estate Board show.

OREB’s members sold 1,586 residential properties last month, an increase of 3.3 per cent from August 2017. Condos accounted for much of that growth with 398 units changing hands, a jump of nearly 11 per cent from the same month a year earlier.

OREB president Ralph Shaw said a tightening supply of rental apartments is driving renewed demand for condos as rents increase and more people consider buying instead.

Ottawa’s rental vacancy rate was 1.7 per cent last year, its lowest level in six years, Canada Mortgage and Housing Corp. figures show. The average rent for a one-bedroom apartment in July was $1,250, according to rent-tracking site PadMapper, a year-over-year increase of nearly 16 per cent.

The scarcity of rental units “is helping ease the oversupply of condos we experienced in the past,” Shaw said. “Hopefully this will encourage developers to move forward with their stalled condominium projects, especially if the light rail is a go in November.”

After a “busier-than-usual” summer, Ottawa’s realtors are gearing up for more of the same this fall, Shaw said.

“An active market is likely to be the new normal for the foreseeable future,” he predicted.

House prices jumped 3.1 per cent year-over-over in August to an average of $433,684. The average condo price rose 2.2 per cent to $276,720.

Shaw said that although the current inventory of housing is “very low,” prices have remained relatively stable because there is plenty of space for growth in Ottawa’s residential market.

“The reason we aren’t yet supply problematic, like some other markets, is that we have the ability to expand in all directions – stretching the buyer’s purchasing power,” he said. “Within an easy 30-minute commute, there are surrounding communities with reasonably priced single-family homes and all the fundamental needs supplied within these neighbourhoods.”