A flood of new listings last month did nothing to slow the rapid increase in local home prices, the Ottawa Real Estate Board reported Thursday.
The local Realtors’ association has previously attributed the dramatic price increases over the last year and a half to an unbalanced market in which buyers outnumbered sellers.
But despite the number of new listings hitting a five-year high last month, average house prices soard 22 per cent year-over-year to $592,548. Similarly, average condo prices skyrocketed 24 per cent to $383,640.
“This is an extremely challenging market for many, especially those on the buying side,” OREB president Deb Burgoyne said in a statement. “As inventory comes on the market, it is quickly being absorbed.”
Indeed, OREB members sold 2,017 properties in August, a 17 per cent increase over the same month last year. To put that number in context, OREB members sold an average of 1,668 homes in August over the last five years.
‘No end in sight’
Burgoyne said multiple offers on properties listed for sale are driving up prices, reflecting the high number of homebuyers drawn into the market by low mortgage rates, relaxed lending rules and Ottawa’s low prices relative to some other markets such as Toronto.
That’s on top of pent-up demand still lingering in the market from the onset of COVID-19 this spring, when many buyers and sellers momentarily retreated to the sidelines, Burgoyne added.
She said Ottawa has, until recently, been “well-insulated” from the rapid appreciation of real estate prices seen in other markets.
“If you look at other larger cities, they have gone through this already,” she said. “We are just in the early stages, with no end in sight at this point. I suspect that prices are not going to come down, nor is activity going to slow down in the near future.”
That outlook contradicts a forecast released in June by the Canada Mortgage and Housing Corp., which predicted that home prices in Ottawa would decline in 2021.