Real estate firm Royal LePage is holding firm on its previous prediction that the aggregate price of a home in Ottawa will increase seven per cent in the final quarter of 2023 compared with the same period last year.
The company’s latest market update comes after a third quarter in which the aggregate local home price rose 2.5 per cent year-over-year to $763,100 and stayed essentially flat on a quarterly basis, increasing 0.2 per cent.
Broken down by housing type, the median price of a single-family detached home in Ottawa increased 2.3 per cent to $879,000 in the third quarter compared with the same period in 2022, while the median price of a condominium increased 1.1 per cent to $396,500.
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“Ottawa real estate is edging towards a more balanced market as home prices stabilize and inventory increases slightly,” John Rogan, a broker at Ottawa’s Royal LePage Performance Realty, said in a release Thursday.
“We are not seeing the same fury of multiple-offer scenarios as we did at the height of the pandemic-fueled boom, but the average days on market is dwindling, as supply levels remain tight,” he added. “Established homeowners are choosing to stay put for longer, which is stalling movement in the market.”
Rogan also said developers are scaling back construction of detached homes in favour of condos and higher-density projects such as townhomes and row homes, putting “added price pressure on the single-family segment.”
The veteran realtor also noted that the Ottawa market has historically been more stable than other markets such as Toronto and Vancouver due to the capital’s healthy economy and relative affordability.
“Long-term, demand will continue to outpace supply and put further upward pressure on prices, even if sales continue to trend downward in the coming months,” Rogan said.
Nationally, Royal LePage is forecasting the aggregate price of a home in Canada will increase seven per cent in the final quarter of 2023 compared with the same period last year, downgrading its previous outlook of 8.5 per cent.
The decrease reflects a sluggish third quarter in which the national aggregate home price rose 3.6 per cent year over year to $802,900, but fell 0.8 per cent on a quarterly basis.
More than half of the 63 regional markets analyzed by the company for its latest house price survey posted a quarter-over-quarter price decline in the third quarter as sales activity softened.
“While many Canadians have adjusted to the increased cost of borrowing, elevated interest rates continue to impact activity in markets across the country,” stated the report released Thursday.
Aggregate home prices in the Toronto and Vancouver regions fell 2.8 per cent and 1.8 per cent, respectively, compared with the previous quarter, while the Greater Montreal Area posted a 0.6 per cent aggregate price increase.
“Prices remain up on a year-over-year basis, with today’s stable market standing in sharp contrast to the steep declines experienced in the third quarter of 2022,” said Royal LePage president and CEO Phil Soper in a press release.
“While trading volumes in most regions remain sluggish, Canada’s housing market is on solid footing, with pent-up demand building. We don’t anticipate a material change in property prices through the remainder of the year.”
Along with the national year-end forecast downgrade, Royal LePage also revised its regional forecasts downward in the Greater Toronto Area, Edmonton and Regina. It maintained its previous forecasts in the greater regions of Montreal, Vancouver, Winnipeg and Halifax.
Calgary bucked the trend as the only city whose year-end aggregate price forecast increased, which the report attributed to sustained activity through the summer and a strong start to the fall. Royal LePage is forecasting that the aggregate price of a home in Calgary will go up by 9.5 per cent in the fourth quarter compared with a year earlier.
“The region, which continues to attract buyers from across the country, saw more moderate yet steady appreciation through the pandemic-fueled boom, and has experienced smaller fluctuations through the recovery, keeping prices stable,” the report said.
Broken down by housing type, the national median price of a single-family detached home increased 3.4 per cent to $833,600 in the third quarter, compared with the same period in 2022, while the median price of a condominium increased 3.8 per cent to $587,400.
On a quarter-over-quarter basis, the median price of a single-family detached home fell one per cent, while the median price of a condominium rose by just 0.1 per cent.
– With additional reporting from the Canadian Press
