Ottawa Real Estate Board predicts ‘heated’ fall market as home sales rise, interest rates drop

David Sali

September 6, 2024

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The Ottawa Real Estate Board says home sales in the nation’s capital jumped more than 10 per cent last month compared with a year earlier, bucking a trend of declining transactions in several other major Canadian cities. A total of 1,100 properties changed hands in August, an increase of 10.2 per cent from the same month last year. That’s a stark contrast to sales figures in some other big Canadian markets. In Toronto, for example, transactions were down 5.3 per cent year-over-year in August, while sales in Vancouver fell 17 per cent from a year earlier and Calgary saw nearly 20 per cent fewer units change hands last month than in August 2023. So far this year, a total of 9,444 homes have been sold in Ottawa, six per cent more than in the first eight months of 2023. David Sugarman, a sales representative with Coldwell Banker Rhodes and Company, said the Ottawa housing market benefits from a “very stable economy” anchored by the federal government. As a result, the National Capital Region's sales terrain tends to be steadier than other major population centres that experience more peaks and valleys, he added. While last year was “tight and tough real estate-wise” as the economy was still “reeling from COVID” and interest rates were rising, Sugarman said things have picked up considerably at his agency in 2024 as rates have started to fall again. “We’ve had a pretty great year so far – phenomenally better than last year and slightly better than the year before for sure.” OREB president-elect Paul Czan said he expects sales activity to keep gaining momentum in the fall as mortgage rates trend lower. On Wednesday, the Bank of Canada announced a third consecutive interest rate cut by a quarter-percentage point. Governor Tiff Macklem said the central bank's decision to bring its key lending rate down to 4.25 per cent was motivated by continued progress on inflation and the need for economic growth to pick up again. That should be good news for potential homebuyers, Czan said. “Being a seasonal market, it’s very encouraging to see sustained levels of activity throughout the whole summer,” he said in a statement. “And coupled with a third consecutive interest rate drop from the Bank of Canada, we are anticipating a heated market in the fall.” The average selling price edged up 0.3 per cent last month compared with August 2023 to $660,341. The composite benchmark price, which aims to represent typical homes, was down 0.3 per cent year-over-year to $646,000. Sugarman said the bidding wars that were commonplace at the height of the pandemic are rapidly becoming a thing of the past, especially for pricier properties, as more supply becomes available. New listings in August totalled 1,907, up 0.2 per cent from last year. Active listings rose nearly 26 per cent year-over-year to 3,324 units. “I think there are a very small percentage of people who are still hoping for those COVID (price) numbers, and that’s not happening,” Sugarman said. “We’re seeing stuff over ($1.3 million or $1.4 million) sort of being delayed, depending on the neighbourhood.” Sugarman said when properties are selling for more than the listed price, they are fetching “no greater than three to five per cent more than asking, as opposed to the days of COVID where 10-plus per cent was (common).” At the same time, Czan said affordability remains a “top concern for most buyers” even as mortgage rates stabilize. “With a stream of new listings hitting the market and prices holding steady, buyers are not moving with urgency,” he said. “They are still using caution and taking their time to find the right property for their needs and budget.” Sugarman said first-time buyers in particular are still finding it challenging to qualify for mortgages. “I think what we’re seeing is we’ve got the bank of mom and dad stepping in,” he explained. “I’ve heard that more than once – actually more than three or four times this year.” The veteran real estate agent said also seeing more situations where multiple buyers, particularly single individuals, pool their resources to purchase a property and then sign a contract outlining the terms of the living arrangements. “Although it’s not a trend, I have heard of it and I’ve witnessed some of it myself,” Sugarman said. Family members are also banding together to buy properties, he added. “Multi-generational homes are definitely back and continue to trend.” – With files from the Canadian Press