Ottawa home sales rose 15 per cent in February compared with the same month a year ago, the Ottawa Real Estate Board said Wednesday, but sales activity continued to lag behind the historical average for this time of year.
OREB says 886 homes changed hands last month, a 15.2 per cent increase from February 2023. However, sales remained 13.8 per cent behind the five-year average and 5.7 per cent below the 10-year average for the month.
OREB president Curtis Fillier said homes remain unaffordable for many would-be buyers. The average price rose two per cent year-over-year to $651,340, with the benchmark price for a single-family home increasing 3.1 per cent to $708,500 and the average benchmark price for townhouses and row units up 0.6 per cent to $495,000.
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New listings jumped 29.5 per cent in February compared with a year earlier to 1,539, while active listings increased 16.3 per cent to 2,158.
“Even with higher prices and the interest rate holding steady, Ottawa is a strong, active market,” Fillier said in a statement. “With metrics across the board up from last year, it’s clear both buyers and sellers are making moves.
“The metrics, however, don’t tell us about all the people relegated to the sidelines because affordability remains out of reach for many.”
The board cited a recent report from Ontario’s Municipal Property Assessment Corp. that showed 19 per cent of the city’s residential properties were valued at less than $500,000 in 2023, down from 79 per cent a decade earlier.
Fillier said real estate agents “know firsthand there is persistent demand for housing in Ottawa, and our market’s activity is constrained by a lack of affordable and suitable supply.”
He said OREB is pushing for measures such as allowing four residential units on property lots and getting rid of exclusionary zoning in an effort to spur construction of more housing.
“There’s a missing middle that we need to build up,” Fillier said.
BoC holds rate steady
OREB announced its February sales figures the same day the Bank of Canada held its benchmark interest rate at five per cent, arguing inflation is still too high to justify lower borrowing costs.
Higher interest rates have helped slow the pace of price growth by causing a pullback in spending in the economy. Canada’s inflation rate dropped to 2.9 per cent in January, falling back within the Bank of Canada’s one-to-three per cent target range.
However, rapidly rising housing costs are standing in the way of getting inflation down even lower. In January, shelter prices were 6.2 per cent higher than they were a year ago.
The Bank of Canada has continued to point out the outsized effect housing costs are having on inflation. But Bank of Canada Governor Tiff Macklem said it’s not the sole issue driving the central bank’s decision-making.
“Yes, shelter price inflation – it is the biggest contributor to inflation right now. It’s certainly weighing on our decisions,” Macklem said. “Having said that, our target is for total CPI inflation.”
– With additional reporting from the Canadian Press
