The aggregate price of a home in Ottawa rose 4.8 per cent year-over-year in the fourth quarter of 2023 but fell from the previous quarter as rising interest rates kept buyers and sellers on the sidelines, Royal LePage said Monday.
The aggregate price of a home was $754,700 at the end of December, the real estate company said. While that was up from the start of the year, it represented a 1.1 per cent decrease from the third quarter, Royal LePage said.
The median price of a single-family detached home increased 4.9 per cent annually to $866,700 in the fourth quarter of 2023, while the median price of a condominium went up 4.5 per cent to $401,100 during the same period.
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While prices cooled near the end of the year, pent-up demand could cause even a slight decrease in interest rates in 2024 to trigger a “surge of activity” in Ottawa’s housing market, said John Rogan, a broker at Royal LePage Performance Realty.
“The Ottawa housing market experienced a slowdown in activity towards the end of the year, allowing for a slight build-up of inventory throughout the region,” Rogan said in a statement.
“While it is typical to see a seasonal decline in activity in the winter months, interest rates have continued to keep both buyers and sellers on the sidelines, with many opting to hold off on transacting until the Bank of Canada lowers lending rates.”
Last month, Royal LePage projected that the aggregate price of a home in Ottawa will increase 4.5 per cent in the fourth quarter of 2024, compared with the same quarter in 2023.
“Heightened activity is expected towards the end of the first quarter as we head into the spring market, especially if we see a decline in interest rates,” Rogan said. “Despite a noticeable uptick in available inventory compared to previous years, I anticipate that we will see upward pressure on housing prices as supply remains outpaced by demand in the region.”
Royal LePage suggested the Canadian market is showing signs of home price stability, with the aggregate price of a home increasing 4.3 per cent annually to $789,500 in the fourth quarter of 2023.
Buyer sentiment can have an equal effect on market trends as inventory or interest rates, according to Phil Soper, president and CEO of Royal LePage.
“I believe the narrative suggesting that the housing market will rebound only when the Bank of Canada lowers rates misses the mark,” he said in a statement.
“The recovery will begin when consumers have confidence the home they buy today will not be worth less tomorrow. We see that tipping point occurring in the first quarter, before the highly anticipated easing of the Bank of Canada’s key lending rate.”
Meanwhile, the Canadian Real Estate Association said Monday it expects 489,661 residential properties to be sold this year – a 10.4 per cent increase from 2023 – and the national average home price to climb 2.3 per cent on an annual basis to $694,173.
– With additional reporting from the Canadian Press
