Last month’s interest rate cut by the Bank of Canada wasn’t enough to send sidelined buyers in Ottawa rushing back to the real estate market, according to Royal LePage’s Q2 2024 Home Price Update and Market Forecast, released Thursday.
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Last month’s interest rate cut by the Bank of Canada wasn’t enough to send sidelined buyers in Ottawa rushing back to the market, according to Royal LePage’s Q2 2024 Home Price Update and Market Forecast, released Thursday.
However, the report said, the expectation of an upswing in market activity following the first rate drop prompted many sellers to list their homes throughout the spring.
According to the report, the aggregate home price in Ottawa increased 2.1 per cent year over year to $777,400 in the second quarter of 2024, and rose 2.6 per cent over the first quarter. The median price of a single-family detached home in Ottawa increased 2.3 per cent year over year to $896,200, while the median price of a condominium increased 1.0 per cent year over year to $404,300.
Royal LePage said it maintains Ottawa’s year-end forecast, with prices expected to increase 4.5 per cent in the fourth quarter of 2024 over the same period last year.
“Many would-be homebuyers continue to sit on the sidelines, an indication that the recent 25-basis point rate cut by the Bank of Canada has not convinced many purchasers to return to the market,” said John Rogan, broker of record, Royal LePage Performance Realty. “Meanwhile, the expectation of a rate drop and a subsequent upswing in market activity prompted many sellers to list their homes throughout the spring.
“While demand has slowed, it is likely to pick up again in the fall, especially if we see further rate cuts. However, the summer months will be relatively quiet, as is typical for this time of year.”
Nationally, the market remains in a prolonged catch-up period and further interest cuts will be required to increase purchasing power and improve consumer confidence, the report said.
“Canada’s housing market is struggling to find a consistent rhythm, as the last three months clearly demonstrated,” said Phil Soper, president and CEO at Royal LePage. “Nationally, home prices rose while the number of properties bought and sold sagged; an unusual dynamic.”
Last week, the Ottawa Real Estate Board (OREB) reported that the number of homes sold totalled 1,439 in June 2024, a marginal increase of 0.1 per cent from June 2023. Home sales were 7.5 per cent below the five-year average, and 13.2 per cent below the 10-year average for the month of June.
On a year-to-date basis, home sales totalled 7,109 units over the first half of the year, an increase of 4.2 per cent from the same period in 2023.
“Ottawa continues to see steady activity as we head into the summer market,” said OREB president Curtis Fillier. “Unlike recent years, buyers have more room to wait, evaluate and be selective when searching for the right property at the right price, leading to a slight uptick in the days on market. Sellers are making moves as evidenced by the inventory and listings. After recovering from last year’s slowdown, Ottawa’s market performance is nearly back on par and continues to make gains.
“It’s going to be an interesting summer and next half of the year. As confidence builds, there will be ample opportunities for both parties.”
According to OREB, the overall composite benchmark price was $647,700 in June 2024, a decrease of 0.5 per cent from June 2023. The benchmark price for single-family homes was $734,300, down 0.2 per cent on a year-over-year basis in June. The benchmark price for a townhouse/row unit was $501,500, down 1.6 per cent compared to a year earlier.
The average price of homes sold in June 2024 was $686,535, increasing 0.5 per cent from June 2023. The more comprehensive year-to-date average price was $681,345, increasing 1.6 per cent from the first six months of 2023.
The number of new listings increased by 4.7 per cent from June 2023. New listings were 0.8 per cent below the five-year average and 1.0 per cent below the 10-year average for the month of June. Active residential listings numbered 3,585 units on the market at the end of June 2024, a gain of 45.5 per cent from June 2023. Active listings were 57.8 per cent above the five-year average and 1.9 per cent below the 10-year average for the month of June.
Months of inventory numbered 2.5 at the end of June 2024, up from 1.7 in June 2023. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
– with files from The Canadian Press
