Ottawa home sales ticked up slightly in December compared with a year earlier but were still well below the five-year average as higher mortgage rates continue to weigh on the housing market.
A total of 565 housing units changed hands last month, the Ottawa Real Estate Board said this week. That’s up 7.6 per cent from the same month in 2022 but 16 per cent below the five-year average for December.
A total of 11,978 homes were sold in Ottawa in 2023, a drop of 11 per cent from the previous year and the lowest number of transactions in a decade.
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But incoming OREB president Curtis Fillier said the year-over-year rise in sales last month could be a sign the market is starting to climb out of the doldrums after a sustained stretch in which inflation and rising interest rates put homes out of reach of many buyers.
“Ottawa’s resale market closed out the year in a steady, balanced state,” Fillier said in a statement. “This could be an early indication that consumer confidence is returning. We likely won’t see the full impact of rate stabilization until the second half of 2024, but December’s activity bodes well for a strong year ahead in Ottawa.”
The average home price in Ottawa was $632,487 last month, a 1.7 per cent increase from a year earlier. But the average home price for the 12-month period from January to December 2023 fell 5.5 per cent from the previous year to $667,794.
New listings were down 12.4 per cent in December compared with the same month in 2022, falling to 523. That was four per cent below the five-year average.
The latest figures come as a pair of major national brokerages are predicting a modest increase in home prices for Ottawa in 2024.
Royal LePage is forecasting the aggregate price of an Ottawa home will rise 4.5 per cent year-over-year by the fourth quarter of 2024, slightly below the national average.
The real estate company says the aggregate price in Ottawa will rise to $771,942 by the end of this year, up from an estimated $738,700 in 2023.
Jason Ralph, broker of record at Royal LePage Team Realty in Ottawa, said even a modest drop in interest rates next year could spark a “flurry of buying activity” in the late summer and early fall of 2024 as borrowing to buy a home becomes less expensive.
Meanwhile, Re/Max says it expects average home prices in the city will rise two per cent in 2024.
“It hasn’t been the easiest market,” OREB past-president Ken Dekker said in a statement. “And while we probably won’t return to the peak levels seen in 2022, Ottawa’s market is poised to recover any ground lost in the past year.”
