Aggregate home prices continue to rise in the nation’s capital as supply issues relegate some prospective buyers to the rental market, according to new third-quarter data from Royal LePage.
The real estate brokerage reported Thursday that the aggregate home price in Ottawa for the three months ending Sept. 30 was $481,948, an increase of 3.7 per cent year-over-year.
The median price of a two-storey home in Ottawa rose 2.9 per cent in the third quarter of the year to $507,408, while bungalows saw an 8.7 per cent jump year-over-year to $496,262. Condos, meanwhile, saw their median sale prices decline by 0.9 per cent to $325,890.
John Rogan, a broker and owner with Royal LePage Performance Realty, said the segment’s drop in median prices reflects more activity in the lower-end of the condo market, as a lack of mid-range and high-end condo units is pressuring buyers into entry-level homes.
An overall lack of supply is keeping many prospective buyers in the rental market instead, he added.
“This puts pressure on every aspect of the market,” Rogan said in a statement.
Royal LePage forecasts that next quarter’s aggregate Ottawa home price will hit $487,249, another 3.7 per cent increase year-over-year and 1.1 per cent growth quarter-to-quarter.
Rogan noted that the run-up to the federal election might see a slowdown in sales, but that activity should pick up again over the following six months.
Phil Soper, CEO of Royal LePage, cautioned federal party leaders in a release that policy proposals aimed at getting more first-time buyers into the housing market might have unintended consequences.
“Well-intentioned election promises aimed at making housing more accessible and affordable to first-time buyers will fall flat if they trigger a surge in demand without a corresponding increase in the supply of homes,” Soper said.
“For example, lowering monthly mortgage payments by stretching repayment over a longer time period looks great on the surface, yet a surge in new buyers could cause prices to escalate, erasing the enhanced purchasing power.”
Nationally, Royal LePage reported that the median price of a home increased 1.4 per cent year-over-year to $630,335.