New home sales declined sharply in Ottawa last month, prompting a major homebuilders’ group to call for quicker action from governments on proposals such as lowering development fees and eliminating the GST for first-time homebuyers. A total of 245 new housing units were sold in Ottawa in April, down more than 20 per cent from […]
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New home sales declined sharply in Ottawa last month, prompting a major homebuilders’ group to call for quicker action from governments on proposals such as lowering development fees and eliminating the GST for first-time homebuyers.
A total of 245 new housing units were sold in Ottawa in April, down more than 20 per cent from the 309 homes purchased in the same month in 2024, according to the latest housing market report from the Greater Ottawa Home Builders’ Association and PMA Brethour Realty Group.
New home sales also dropped 16 per cent from March, when 291 units were sold. Transactions since the start of January are now down five per cent year-over-year, erasing a strong start to 2025, the association said in a news release this week.
While Ottawa didn’t see the same downturn in new home sales some other big Canadian cities experienced earlier in the year, GOHBA executive director Jason Burggraaf said headwinds such as economic uncertainty triggered by the global trade war are catching up to developers in the nation’s capital.
“I think finally now we’re seeing maybe that shoe has dropped a little bit,” Burggraaf said in an interview with OBJ on Thursday.
He said an industry that was already struggling for the past few years with rising interest rates and surging development fees now faces consumers who are hesitant to pull the trigger on new home purchases as they anxiously monitor the ongoing trade war and wait to see if governments make good on various policies aimed at easing the housing crisis.
Prime Minister Mark Carney, for example, pledged during the recent federal election campaign that his government would scrap the GST on all “new and substantially renovated” homes worth up to $1 million that are sold to first-time buyers.
Meanwhile, Ontario Housing Minister Rob Flack introduced a bill designed to speed up new housing construction through a number of measures, including “simplifying, streamlining and reducing” development charges across the province.
Burggraaf said those announcements are enticing would-be buyers to hold off on purchasing new homes until the proposed measures take effect.
“Why wouldn’t I wait another two, three, four (months), however long it takes, to save … somewhere between thirty and eighty thousand dollars on a home?” Burggraaf said.
“I’ve got (developers) already commenting that … the amount of activity they typically would have seen at sales centres (from first-time buyers) has dropped off completely.”
Burggraaf said homebuilders “desperately need certainty” on whether the federal and provincial governments plan to go ahead with measures aimed at cutting the price of new homes.
“Demand doesn't go away,” he added. “It just stays pent up on the sidelines. There are a lot of people out there just sort of waiting for the right conditions to jump back into the market. It’s a matter of when those conditions are going to be settled.
“I was hoping against hope that we would continue to kind of buck the downward trend of consumer confidence on the sales side. Hopefully we get some certainty from … government and some hard timelines so we can pull ourselves out of it sooner rather than later.”
Recovery 'dragging out'
The ongoing uncertainty is stymying the bounceback builders were hoping for once the Bank of Canada began cutting interest rates last year, Burggraaf said.
“Unfortunately, that hurts the industry overall because we’re not building on spec,” he explained. “Everything’s kind of made to order, and it’s dragging out the possibility of a recovery. We’ve been in this kind of bottom-of-the-market cycle since 2023. The light at the end of the tunnel has dimmed. We thought it was getting brighter, and now it feels like it’s pulling farther away again.”
A deeper dive into April’s sales figures shows the city’s south end continues to be the most popular area for homebuyers, accounting for 42 per cent of all new home transactions last month. The west end captured 29 per cent of sales, while the east end accounted for 24 per cent and central Ottawa landed five per cent of all sales.
The east end has seen the biggest gains in recent months, with sales up 16 per cent compared with the same period a year ago.
Burggraaf said the east end has traditionally been “more neglected” when it comes to new home construction, but sales have been “steadily growing” in the area.
“It maybe took a little longer to catch up to Barrhaven and Kanata in terms of the shopping and community amenities and everything else, but it’s all there now,” he added.
In terms of housing types, townhomes continued to dominate the market, accounting for 55 per cent of all new home sales in April.
Single homes followed at 29 per cent, a five per cent boost from March. Condominium townhomes represented 13 per cent of sales, while condo apartments made up just two per cent.
While condo sales have plummeted in Toronto and some other cities in recent months as uncertainty grips the industry, Burggraaf noted condominiums have never made up a significant portion of the Ottawa market.
“The condos we have here are generally bigger and geared more so to families,” he explained. “It’s not predominantly that investor class that they have in Toronto. It’s just a smaller chunk of the market, and it hasn’t grown into a desirable product type here in Ottawa. Condo living as a lifestyle is just not as big a thing as it is in Toronto or the Golden Horseshoe.”
