Home sales in the Ottawa region are being held back by low inventory and the impact of the mortgage stress test.
Ottawa Real Estate Board members reported 2,032 sales in April, up just 0.4% from a year earlier. Sales remain above the 5-year average for April (1,825).
“The story hasn’t changed throughout this spring – our market is clearly suffering from low inventory, and we predict these conditions will persist until supply is restored,” states Dwight Delahunt, President of the Ottawa Real Estate Board. “Residential supply is down 18%, and condo inventory is down almost 40% from last April. Despite this tight supply, the residential market is holding its own and the increase in unit sales is effectively coming from the condo market which until recently, was in a surplus.”
Delahunt also noted that the mortgage stress test continues to restrict buyers’ options especially with prices escalating.
The average sale price of a residential-class property sold in April in the Ottawa area was $488,729, a rise of 7.4% year-over-year, while the average sale price for a condominium-class property was $307,659, an increase of 14.3% from April last year.
“Certainly, the stunted supply is likely responsible for the multiple offer situations we are experiencing, but the reality is that while approximately one-third of properties are selling above asking, more than 50% are still selling below the listed price,” Delahunt said.
He emphasizes that the market remains stable and affordable and is certainly not in a bubble.