It marked the ninth consecutive month that home sales in the capital declined compared with a year earlier.
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Home sales continued to drop in November amid rising interest rates and soaring inflation, with activity in the capital barely half of what it was the previous year, the Ottawa Real Estate Board said Tuesday.
A total of 846 residential properties changed hands last month, down 42 per cent from the 1,456 sales recorded in November 2021. It marked the ninth consecutive month that home sales in the capital declined compared with a year earlier.
While the Ottawa market was in the midst of a buying frenzy a year ago, last month’s sales tallies were low even by longer-term standards. The five-year average for November transactions is 1,270.
“There’s no doubt that we’re in a buyer’s market,” said Ross Tavel, a broker at Ottawa’s eXp Realty.
The average property is now staying on the market for 30 days as prospective buyers sit back and wait to see whether interest rates will keep rising, Tavel explained.
The high-water mark for home prices in Ottawa came in March, the same month the Bank of Canada began a string of six consecutive rate hikes in its bid to rein in soaring inflation.
Since then, average residential home prices have fallen nearly 19 per cent and condo prices have dropped more than nine per cent.
The average price of a residential-class property was $680,031 in November, compared with $837,517 in March. Meanwhile, the average condo sold for $415,533 last month, down from $458,107 when the market was at its peak eight months earlier.
“I’ve had fantastic listings where … last February they would have sold in a very short period of time for at least 20 per cent over what we had them listed for right now,” Tavel said.
OREB president Penny Torontow noted softening sales and prices are “not isolated to our market.”
The Toronto Regional Real Estate Board said Tuesday sales were down 49 per cent in November from a year earlier, while 53 per cent fewer homes changed hands in Vancouver last month compared with the same month in 2021.
Meanwhile, the Quebec Professional Association of Real Estate Brokers said Monday that sales numbers for Montreal dropped 38 per cent from a year earlier.
“Globally, we’re still adjusting to the post-pandemic world and that affects demand, pricing, interest rates, cost of living, supply chain disruptions and more,” Torontow said in a statement. “As a result, those who can are waiting and watching.”
Still, Tavel said he believes the market is close to bottoming out.
While the central bank is widely expected to announce another hike in its benchmark rate on Wednesday, Tavel is predicting that rates will soon level off as inflation starts to abate and potential buyers who’ve been staying on the sidelines re-enter the market.
“I think things are going to really pick up near the end of February,” he said. “I think there are still buyers that are sitting in the weeds right now waiting to see what happens. They don’t want to overpay, so they’re holding off.”
Torontow said market conditions are particularly tough on first-time buyers grappling with high borrowing costs and stringent stress tests, prompting many would-be purchasers to rent instead.
Rental properties secured through OREB’s multiple listing service were up 27 per cent in November from a year earlier, the board said.
“The rental market is gaining momentum,” Tavel agreed.
Last week, Re/Max Canada said it expects average Ottawa home prices to rise four per cent in 2023, bucking its predicted national trend of widespread price declines across most major Canadian cities.
– With files from the Canadian Press
