Pent-up demand fuels January surge in Ottawa housing market: real estate board

Home prices are showing signs of stabilizing after the Bank of Canada's initial interest rate hike on March 2, 2022. Craig Lord / Global News

The effects of Ontario’s latest stay-home order amid the novel coronavirus on Ottawa’s housing market are yet to be seen, the local real estate board said this week, but “pent-up buyer demand” in the nation’s capital still drove a surge in January sales figures.

Members of the Ottawa Real Estate Board (OREB) sold 964 properties last month, an increase of 24 per cent over January 2020. Of those sales, 674 were in the residential property class, while 290 were condos.

Read more: B.C. real estate defies pandemic with sales, price growth in 2020

As far as sales prices go, the average condo sale was priced at $380,336 in January, a year-over-year increase of 13 per cent from last year and a seven per cent increase from December 2020.

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The average residential sale price last month ballooned to $677,197, up 31 per cent from January 2020 and up 12 per cent compared to the previous month.

But OREB President Debra Wright cautioned market watchers from reading too much into the soaring home prices. She pointed to increased sales activity at the higher end of Ottawa’s real estate market as driving the spike in value — 63 properties sold for more than $1 million last month, compared to just 16 in that price range a year ago.

Click to play video: 'Matt Lee looks at Kingston real estate stats for January' Matt Lee looks at Kingston real estate stats for January
Matt Lee looks at Kingston real estate stats for January – Feb 2, 2021

Despite a surge in post-holiday listings early in the month, Ottawa is still facing a tight housing inventory, Wright noted. The stay-home order, which came into effect provincewide on Jan. 14, instilled an immediate slowdown on new listings in the local market, she said.

Inventory levels are now down “substantially” from this time last year, according to OREB, with 43 per cent fewer properties now on the market. If there were more stock, Wright expects sales would have been even higher in January.

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“This inventory shortage coupled with strong demand triggered a brisk pace to the market. We would have certainly seen higher sales numbers if there were more properties available because the demand is definitely there,” she said.

While overall market activity is lower than it was at the end of 2020, the long-term prospects for Ottawa’s housing market in 2021 could be affected by the length of the current COVID-19 lockdown measures, Wright said.

“If the lockdown is extended, that could affect the market in the longer term; however, as we saw last year, the market was resilient throughout and is being driven by the needs of buyers and sellers.”

Click to play video: 'Agent shows Toronto home with COVID-19-positive residents inside' Agent shows Toronto home with COVID-19-positive residents inside
Agent shows Toronto home with COVID-19-positive residents inside – Jan 22, 2021

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